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Companies are dynamic legal entities which operate in turbulant world of business. Therein where business happiness has changeable nature which means that period of time of success and prosperity could be changed with period of time of crisis and losses, and all in a circle. Those changes particularly has influence on the shereholders who oftenly decide to sell or present their shares in company. In next line Law firm Belgrade for company law will describe you the procedure of a directed placement of shares, particularly in limited liability companies (LLC).

The share is property right of LLC which possess the member of company (shareholder) on the ground of investing some stake in such company. Companies Act of the Republic of Serbia provides that shareholders have a right of  unlimited  directed placement of shares, except if such Act or memorandum of association provides something different. The principle of unlimited directed placement of shares is rule but there are important exceptions like pre-emption rights of shares.

PRE-EMPTION RIGHTS

Domestic legislation, in the purpose to protect interest of remaining shareholders of the entry of “interuder” in LLC provides as dispositive rule – pre-emption rights. That legal term means that shareholder who want to make a directed placement of shares (transfer) to third person previously shall make a offer to the remaining shareholders in LLC.

That offer shall be made in written form and contains all essential elements which are requested for the Agreement of a directed placement of shares, particularly amount of share and the cost. Also, it is necessary that the offer contains the adress where the acceptance could be sent, the deadline for formation and notarization the Agreement of transfer of shares, sush as some another elements which are provided by memorandum of association. Law firm Belgrade for company law can provide you legal assistance in the procedure of preparing that offer.

The shareholder who intends to use his pre-emption right shall make a acceptance, in written form, within 30 days starting from the day of getting offer. It is also possible that there are more shareholders who intend to use their pre-emption rights, but they can not make agreement with the seller of share related to the amount of share which each of them can buy. In that case, each shareholders can buy amount (part) of shares in propotion to their existing holdings in the sum of all holdings of shareholders who accepted the offer.

For example, if we consider that LLC has 3 shareholders: sherholder A (seller of share) has 50% of share, shareholder B has 30% of share and shareholder C has 20% of share. Transfer of share will be completed on the way that shareholder B will acquire 30% of the share of shareholder A and shareholder C will acquire 20% of the share of shareholder A. All of that because shareholder B has initally higher amount of share than shareholder C, in propotion 3:2.

If no one shareholders do not use their pre-emption rights the seller of share within 90 days starting from the day of expiration deadline for acceptance can make a directed placement of shares to third person. That Agreement of directed placement shall not contains more favorable conditions for third person (buyer) than conditions from offer which remaining shareholders have refused.

The pre-emption rights is not imperative which means that it can be excluded by memorandum of association.

OTHERS LIMITATIONS OF A DIRECTED PLACEMENT

The shareholders have a possibilities that provide others limitation of a directed placement of shares in company`s memorandum of association. Because of that the role of Law firm Belgrade for company law is so important. It contains analyzing and advicing clients about all legal options which they have in purpose to protect their own interest and interest of the LLC. According to that, shareholders can agree that a directed placement of shares can be conditioned by previous consent of LLC.

This term of company law means that the seller of share has obligation to submit request to the company in purpose of getting consent. That request shall contains the identity of person who should acquire the share and all substantial elements of  the Agreement of a directed placement. The decision about giving consent will be made by assambly of company which is composed of all remaining shareholders. It needs votes of ordinary majority for giving consent, except if memorandum of association provides some “stronger” majority.

Thus, if LLC within 30 days starting from the day of submitting request in purpose of getting consent for a directed placement of share do not inform the seller of share that the consent is refused he has legal right to make a directed placement of share to the third person, in accordance to the conditions from request.

Companies Act of the Republic of Serbia provides one special conveniance for LLC which can, instead to giving a consent, to appoint third person, according to its own choice, thereon the seller of shares will make a directed placement. If the LLC uses that special conveniance the seller of shares shall transfer the share exclusively to the that third person. However, if a that third person do not make a Agreement of a directed placement within 15 days starting from the day of informing seller of shares about that appointed third person, the seller of shares has a legal right to make a directed placement to some another person.

HOW A DIRECTED PLACEMENT CAN BE DONE?

A directed placement of shares in LLC can be done by the Agreement of a directed placement. Transfer of share can be done with payment or gratis. The parties – seller and buyer shall notarize their signature on the Agreement of a directed placement before the Public Notary. The notarization fee cost 3 euros per signature, on other hand, if the parties are legal entities they shall pay little more. That Agreement shall contains all substantial elements in accordance to the laws and we advice you to provide legal assistance from some Law firm Belgrade.

A directed placement of shares shall be registered before Serbian Companies House. In purpose of registration transfer of shares it is necessary submit next documents:

• Application for registration of a directed placement of share
• Agreement of a directed placement with notarized signatures of parties
• Copy of identity card (for Serbian)/passport (for the foreigners) or receipt from Companies House (for legal entities) of the buyer of share who entry in the company first time
• The proof about paid fee  for registration of a directed placement which cost 24 euros

For more information about this issue, as well as others issues from the domain of company law you can contact some Law firm Belgrade for company law.