Društvo sa ograničenom odgovornošću

Društvo sa ograničenom odgovornošću (Serbian Cyrillic: друштво са ограниченом одговорношћу; abbr. d.o.o., Serbian Cyrillic: д.о.о.) is a kind of legal corporate entity in Serbia which literally means (but is not entirely equal to) "limited liability society". It is often confused with the American term limited liability company, with which it shares some characteristics, but it is more similar to a limited partnership.

History

If we look deeper at organization of d.o.o. it had most similarity in legislation form to Italian Società a responsabilità limitata because Italian laws where used at first as example of such entities in making Serbia own legislation. d.o.o. is first time mentioned in 1996. law[1] and now is formed and incorporated under "Zakon o privrednim društvima" - Law on corporate societies [2]

Cost of formation and running d.o.o., owners and capital form

Under law d.o.o. is registered under state agency for corporate registration - "Agencija za privredne registre"[3] by at least one owner that could be in same time managing director. A small amount of money is required as starting capital since 2012 that is about one euro in 2019. and in 1996. it was required 5000 USD. There is various tax that applies in moment of incorporating that amount about 90 euros in 2019. without cost of special permissions required for some business forms and cost of mediators for incorporation of d.o.o. Registration of d.o.o. is now cheap but expenses are high.

Since 2018. it is possible to do most of registration of d.o.o. form online[4] in "Agencija za privredne registre".

Beside owner d.o.o. must have managing director that could be in same time owner. In cases when owner is director additional monthly cost to owner always applies because owner or director must pay many taxes and contribution regardless d.o.o. is having or not having profit or income at all. That expense goes at least about 200 euro a month in 2019.[5][6] Big expenses cause many small firms under d.o.o. form to close as there is many hidden costs. [7]

Fines are very high and there is a large set of different laws that have many fines for owners and directors of d.o.o. that could be sometimes very disproportionate and arbitrary to actual wrongdoing or free to act by they issuers that makes d.o.o. less likable form for start-ups and small business in Serbia. Criminal legislation is also very strict until recently there was law that enabled almost all owners to be criminally charged for literally anything, since 2011 there is a little better situation in legislation [8] but still not so good. [9]

d.o.o. owners may not issue shares that have par value, they have units of the shared capital that is seen as percentage of ownership. Owners can use different forms of assets to increase values of founding capital not just money. Some other factors in organization including different allocations of profits and assets show that d.o.o. is more similar to a limited partnership.

Differences among doo

There is no limit in number of employees for doo in Serbia. In same time doo is under a law divided by number of employees into micro(up to 10 employees), small(up to 50 employees), medium(up to 250 employees) and large(more than 250 employees. Also revenue is another factor that makes differences in size.[10]Based on size doo is subject of different legislation about environment, accounting and financial reports among other things.

Liability

Despite d.o.o. is having in name limited liability after new set of laws is introduced in Serbia since 2011. in most cases that is not true. As amount of capital to incorporate d.o.o. was reduced from 5000 USD in 1996. to mere 100 dinars (less than 1 euro in 2019.) liability has increased. Owners and owners with control stakes are liable in many cases. For example members with control stake are responsible with all their properties in case of forced liquidation 3 years after liquidation was commenced. Members are responsible with all their properties in case of punctures of legal personality such is when creditors are damaged, members of d.o.o. have responsibility in cases of bankruptcy etc. [2][11] Cases of liability in laws are given very wide and they are not specifically determined in law so it is possible to be accused in court of law in many circumstances. There is also conflict among Serbia laws and by-laws in some cases that requires of owners or managing director of d.o.o. to do something in some circumstances that are in same time prohibited under some laws. For example payment law [12] prohibits payment from account when bank account of d.o.o. is under blockade to anyone except entity that has been authorized to receive payments from such account but some laws or by-laws insist that payments such are some taxes must be made or owner and/or director of d.o.o. will be held liable regardless of account blockade.[13][14]

Taxes

Doo in Serbia is for most time subject of double taxation on profits, always if owner is resident from Serbia. It is first paid on a basis of yearly financial reports and it is again paid if owner try to raise profit from account. Currently in 2020. corporate tax on profits is 15% based on Law on Corporate Income Tax.[15] If owner of doo wishes to withdraw from account profit share it is subject of another 20% withholding tax. Serbia has about 60 contracts with other countries to avoid double taxation most of them from EU.[16] but that only applies if owner of doo in Serbia is already applied to be taxed for profit in country that has signed contract about avoiding double taxation with Serbia. For income tax purposes, an individual is considered resident if he/she has a residence or center of business or stays in Serbia for at least 183 days in the total during the year.

For large investors there is a scheme that allows 10 year tax holiday for profit tax in case of investments in fixed assets over 1 billion dinars(about 9 million euro) and minimum 100 new open jobs.[17] For small investors and start-ups there is no such initiative.

Also doo in Serbia if have more then 8.000.000 dinars(about 67.000 euro in 2020) of revenue in last 12 month are mandatory subject of VAT with special VAT rate 10% or general VAT rate of 20% depending on goods or services provided with mostly higher 20% rate used.[18]. Lower VAT rate is mostly used for medical devices and prosthesis, school books and accessories, some agriculture products.[19]

References

1. "Paragraf Lex Demo". demo.paragraf.rs.
2. "Zakon o privrednim društvima". www.paragraf.rs.
3. "Агенција за привредне регистре | Почетна". www.apr.gov.rs.
4. "Агенција за привредне регистре | еРегистрација оснивања предузетника". apr.gov.rs.
5. Vučković, Biljana. "Kako da otvorite firmu i POKRENETE BIZNIS u Srbiji". Blic.rs.
6. Serbia, RTS, Radio televizija Srbije, Radio Television of. "Male firme, veliki problemi". www.rts.rs.
7. "Mala preduzeća u Srbiji - visoki nameti i preživljavanje, a težak put do podsticaja". www.021.rs.
8. "Zloupotreba odgovornog lica od 15. aprila novo krivično delo » saop.rs". www.saop.rs.
9. "Pripremite vaš biznis za novu regulativu o zaštiti podataka o ličnosti". April 17, 2019.
10. https://www.paragraf.rs/dnevne-vesti/160117/160117-vest17.html
11. "Zakon o stečaju". www.paragraf.rs.
12. "Zakon o platnom prometu". www.paragraf.rs.
13. "Naplata potraživanja od dužnika u blokadi - Advokatska kancelarija Dragana Lj. Đorđević". Advokat Dragana Đorđević. May 28, 2018.
14. "Data" (PDF). www.mngcentar.com. Retrieved 2020-01-30.
15. https://www.paragraf.rs/propisi/zakon_o_porezu_na_dobit_pravnih_lica.html
16. http://www.oecd.org/tax/treaties/beps-mli-position-serbia.pdf
17. https://www.paragraf.rs/propisi/zakon_o_porezu_na_dobit_pravnih_lica.html
18. https://www.paragraf.rs/propisi/zakon-o-porezu-na-dodatu-vrednost.html
19. https://www.paragraf.rs/propisi/pravilnik_o_utvrdjivanju_dobara_i_usluga_ciji_se_promet_oporezuje_po_posebnoj_stopi_pdv.html