Starting a business from a legal perspective is a crucial aspect for every entrepreneur. Many subsequent questions that can significantly facilitate or complicate regular operations and increase or decrease business costs depend on the choice of legal form (structure) of the future business. These questions may seem harmless at the beginning. Over time, if not well structured and defined from the outset, they lead to a series of “unexpected” situations, legal pitfalls, and ultimately to the need to switch from one legal form, in which the business started, to another legal form that could and should have been chosen from the very beginning, thus avoiding all complications.
According to the criterion of mutual connection of members of the company, business entities can be divided into companies with personal liability and companies with capital liability.
Registration of business entities in Montenegro is done in the Central Register of Business Entities.
There are four legal forms of business entities:
Partnership
Partnership is a multi-member company established by partners who assume unlimited joint liability for the company’s obligations and operate under a common business name. It is established for profit-making purposes. The partnership is liable with all its assets for the obligations it undertakes.
This type of company has legal personality. Emphasis is placed on protecting the creditors of this company because a creditor does not have to seek satisfaction of their debt from the company itself, but can demand fulfillment of the debt from any of the partners. The contribution of partners in a partnership can be in cash, assets, and rights, as well as in work or services, which have been or are to be provided. A partnership is established by concluding a partnership agreement in written form.
The registration of a partnership in the Central Registry of Business Entities is done based on a registration application along with a partnership agreement.
Limited partnership
A limited partnership is a business entity formed by two or more individuals and/or legal entities as partners to conduct a specific business activity under a common business name. In a limited partnership, at least one partner has unlimited liability for the company’s obligations (the general partner), while at least one partner’s liability is limited to the extent of their agreed-upon contribution (the limited partner). The limited partnership is liable for its obligations with its entire assets. There is no prescribed minimum share capital for the company.
A limited partnership is established by a founding agreement that includes the designation “limited partnership,” identifies the general partners and limited partners, and specifies the type and amount of contribution of each limited partner to the partnership. Limited partners cannot independently dispose of their interests in the partnership or transfer them to third parties without the consent of all partners.
Joint-stock companies
Limited liability company (LLC)
Business activities can also be carried out by:
ENTREPRENEUR
An entrepreneur is an individual who engages in economic activities independently, without working for another entity. Entrepreneurs are focused on initiating and organizing the operations of a business, with the goal of creating new markets and generating profits. The scope of entrepreneurship encompasses various types of business activities. It fosters creativity and the generation of ideas. Entrepreneurs create their own jobs, work activities, and business ventures. From craftsmen and artisans to CEOs of large multinational corporations, entrepreneurs come from diverse backgrounds. What matters most is having an original idea, the necessary knowledge, and the energy to pursue their business dreams.
If you are considering starting a company, please contact our team of experts so that we can provide you with a suitable offer to assist you in achieving that goal.