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Transformation of legal form from open to closed joint stock companies or limited liability companies

 

Obligation to register ownership over shares in the Central Register

 

New methods for Shareholder Assemblies
Transformation of legal form from open to closed joint stock companies or limited liability companies

Enforcement order of Law on economy entities and Law on the market of securities and other financial instruments (12/11/2006), like other relevant articles and clauses, conditions have been created for conducting changes in legal form for joint stock companies and that:

  • from open to closed joint stock company

  • from open joint stock company to limited liability company.

Requirements for conducting foregoing legal form changes are:

  • for transferring from open to closed joint stock company, the prerequisite is a maximum of 100 shareholders,

  • for transferring from open to limited liability company, the prerequisite is a maximum of 50 shareholders.

If you are interested in conducting some foregoing legal form changes, with pleasure we announce that our experts from Center are able to complete the procedure for you, and create all needed documentation for legal form changes.

The results of legal form changes from open to closed joint stock company or limited liability company are:

  1. turnover shares (or stakes) is completed without assistance of the Stock Exchange,

  2. rise in capital due to new stakes (monetary or non-monetary) is completed without confirmation of Securities and Exchange Commission,

  3. decreasing running costs per financial market institutions,

  4. an increased freedom defining the companies board and its relationship towards shareholders (or stakeholders),

  5. the opportunity to use a changing of legal form as a means to buying shares from a minority shareholders at market value and also the opportunity for the minority shareholders to achieve legitimacy on receiving true market value on their shares etc.

Center is also capable in offering models for reducing existing number of shareholders to requested number in order to make a legal form change. 

 

For all the information and suggestions of legal form changes, we suggest you to visit us enable us to transfer our experience and possible solutions.

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Obligation to register ownership over shares in the Central Register

Enforcement order of Law on Securities Trading and other financial instruments (from 01.10.2003), as well as relevent subregulation acts (from 29.10.2003), and formation of the Central Register shares. conditions have created enforcement of specific stipulations on quoted rules for corporations. Along with the changes that make new law compared to the Law on Securities and Law of the Exchange, operations of the exchange, and Stock Brokers (who have expired), like the most important in line are fulfillments that are acheived in these ways:

Clause 260 Law, rule is the obligation of every corporation to give data on its owners in the timeframe of 60 days from the day of established law,

Clause 210, Central Register has the obligation to give a list of shareholders, in other words by authorization of corporations in order to resolve true votes at the Shareholder's assembly, and also in order to achieve rights in payouts of dividends and

Clause 262 written are procedures and deadlines for dematerialization of securities.

Stated are three stipulations of Law, besides the Law on Accounting, show the importance of usage of information systems for monitoring analytics of owners for shares.

First, harmonization of existing data on shareholders with needed information system of the Central Register in the goal of preparation and sending of data needed in order to register ownership of shares. In addition to this after finishing registration the Central Register will for every sitting of the Shareholders assembly, by request of corporations generate a list of shareholders in the goal of forming voters for sectionals.

How the majority of privatized firms or semi-privatized firms receive such a high number of shareholders - physical entities who achieved their shares free or purchased by sub ownership guidelines, in this way every session of the shareholder's assembly, without the use of adequate information systems, required is a lot of time and effort to complete preparations for voting. This same problem exists with the payout or reinvesting.

On the other hand, by Law of Accounting, the corporation's obligation is to give every shareholder information on amount of his capital, and in the goal to report tax on property. The Central Register can and will not manage data on the amount of total capital (revolving and other reserves), and the amount of loss compared to profit, and the fact that there are demands for managing register of shareholders at the actual corporations.

The goal to complete stated legal rules, International Center for Financial Market Development has for its own clients and corporations developed needed software solutions and procedures, and took over the needs before authoritive institutions, in order to proceed further without the hassle of managing the register of shareholders and fulfill legal obligations.

In case you have doubts with translation and changing of quoted law decipherments, we suggest that you give us a visit so that we can share our experiences and possible solutions.

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New methods for Shareholder Assemblies

Rulebook contains forms on attorney statements, which the Securities Commission enforced, and became effective 29.10.2003; rules are regulations and obligations in order to represent shareholders at Shareholder assemblies. In conclusion, citated acts in the rulebook:

Clause 2.

Attorney statement is a written document, which calls upon shareholders with legal vote in the shareholders assembly to give power of attorney to specific entities quoted in this statement for representation at scheduled or unscheduled assemblies of those corporations.

Physical entities that plan to initiate summons for shareholders to give power of attorney for representation at shareholders assembly obligated to prepare representative statements and to give them to these shareholders in conjunction with this rulebook.

The structure sides of the representative statements are proposals of power of attorney and give shareholders with these statements.

Član 5.

Zahtev za odobrenje zastupničke izjave podnosi se Komisiji za hartije od vrednosti 30 dana pre dostavljanja poziva za održavanje skupštine akcionara i zastupničke izjave akcionarima.”

Kao što se iz navedenog može zaključiti, priprema zasedanja skupštine akcionara je poprilično iskomplikovana, tako da od akcionarskog društva zahteva dodatne napore i troškove. Poslovi koje treba izvršiti su sledeći:

Priprema podataka o mogućim zastupnicima u skupštini akcionara,

Priprema Zahteva Komisiji za hartije od vrednosti za odobrenje predloga Zastupničke izjave sa predlogom punomoćja,

Prijem i evidentiranje podataka o vlasništvu nad akcijama svih akcionara dobijenih od Centralnog registra,

Priprema i štampa Zastupničke izjave sa punomoćjem za sve akcionare koji mogu biti zastupani u Skupštini,

Evidentiranje izjašnjenja svakog akcionara o svom punomoćniku,

Evidentiranje izjašnjenja svakog akcionara o svakoj tački dnevnog reda.

Keeping in mind the above stated, technology prepares and manages sessions of shareholder assemblies, requests participation and training a large number of employees of existing or, participating partners who have experience from the field and those who are personnel, hardware and software committed to finish the job correctly and the right way by stated deadlines.

International Center for financial market development is present in our market since 1998, and amongst all stated, its services of managing portfolio shares and representation of over 7000 shareholders in corporations (Hemofarm Koncern joint-stock corporation, Velefarm joint-stock corporation, Holding Company, and so on). This way Center has developed needed software solutions (ISUP, ISSA), just like the procedures needed to complete representation of shareholders bz new regulations, and the completion of quoted procedures in corporations which shareholders do not represent.

In the goal to intercept additional costs for completion of everz session of Shareholder assemblies like other procedures (harmoniyation with the Central Register, calcualtion and dividend pazout, announcement of capital gain, overlook capital structure by interesting groups, and so on) we suggest you visit our firm and meet with our staff, services and our acheivements, this way we can offer you ways to detour new and exitisting problems.

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