Legal due diligence before buying a company in Serbia
Before you buy a Serbian company or a share in one, a legal due diligence shows what you are actually buying: who owns it, what it owes, which contracts and permits it relies on, and which risks it carries. The findings are then reflected in the price and in the share transfer agreement, which must be certified by a notary and registered with APR.
Why due diligence matters
When you buy a share, you buy the company with all its history. Its debts, disputes and obligations stay with it after the change of owner. Due diligence is the way to find these issues before signing, while they can still be addressed through the price, conditions or guarantees in the contract.
The scope depends on the size of the company and the deal. A small company with few contracts needs a shorter review than a manufacturer with property, staff and permits. We agree the scope with you at the start.
Ownership, registers and the share itself
The starting point is the Business Registers Agency (APR). It shows the legal form, the registered owners and their shares, the directors and representatives, the registered capital and the status of the company. The founding act and any members' agreement show the rules on transfer of shares, such as the pre-emption right of other members.
Check whether the share is pledged or otherwise encumbered. Registered pledges are recorded in public registers kept by APR. For a joint-stock company, shares are recorded with the Central Securities Depository.
- APR business register extract and registration history
- Founding act and members' agreement
- Pledges and other encumbrances on the share
- Beneficial owners recorded in the Central Register
- Powers of directors and any procurations
- Decisions of the shareholders' meeting
Contracts, staff and disputes
Key contracts are reviewed for terms that could be triggered by the sale, such as change of control clauses, exclusivity or termination rights. Loan and security agreements are checked for restrictions on changes of ownership.
On the employment side, we review employment contracts, internal rules, managers' agreements and any pending labour claims. Employees stay with the company when the share is sold.
Pending and threatened court cases, enforcement proceedings and administrative proceedings are listed and assessed. Court records and the company's own files are both used, because not everything is visible from outside.
Tax, accounts, property and permits
The National Bank of Serbia shows whether the company's accounts are blocked, now or in the past. The Tax Administration can issue a certificate on settled tax obligations. Tax issues themselves, such as open audits or risky transactions, should be reviewed by your tax adviser or accountant in parallel with the legal review.
Real estate owned or used by the company is checked in the cadastre, together with building and use permits and leases. Licences and permits needed for the business are checked for validity and for any conditions linked to a change of owner.
- Blocked accounts and enforcement against the company
- Certificate on settled tax obligations
- Real estate in the cadastre, mortgages and leases
- Building and use permits
- Business licences and permits
- Intellectual property, such as trademarks and domains
The share transfer agreement
For a d.o.o., the share transfer agreement is made in writing and the signatures of the parties must be certified by a public notary. If a party signs through an attorney, the power of attorney also needs certification, and if it is signed abroad usually an apostille.
The agreement reflects the due diligence findings. Typical tools are warranties by the seller, conditions that must be met before closing, specific indemnities for known risks and a payment structure, for example with part of the price held back. Depending on the size of the parties, approval of the Commission for Protection of Competition may be required before closing.
Registration with APR and after closing
The change of owner is registered with APR. The transfer takes effect towards the company and third parties from registration. After that, the beneficial owner records, the bank's records and the authorized signatories are updated, and any change of director is registered.
Our office agrees the scope of the review, prepares a written report that sets out the risks in plain terms, drafts or negotiates the share transfer agreement and handles the registration. We work in English and can act under a power of attorney.
Frequently asked questions
What does legal due diligence cover in Serbia?
Usually ownership and the share, corporate documents, key contracts, employment, disputes, real estate, permits and the company's accounts. Tax and financial matters are reviewed in parallel by tax advisers and accountants.
Where can I check who owns a Serbian company?
In the Business Registers Agency (APR), which shows registered owners, shares and directors. Beneficial owners are recorded in a separate Central Register of Beneficial Owners.
Does the share transfer agreement need a notary?
Yes. For a d.o.o. the agreement is made in writing and the signatures of the parties must be certified by a public notary.
When do I become the owner of the share?
The transfer takes effect towards the company and third parties from its registration with APR. Payment terms are often linked to that registration.
Do the company's debts stay after the sale?
Yes. When you buy a share, the company keeps all its rights and obligations. That is why debts and risks are checked before signing and addressed in the contract.
Do employees stay with the company?
Yes. A sale of a share does not change the employer, which remains the company. Employment contracts continue as before.
This guide provides general information and is not legal advice for your specific case. Send us your question for an assessment.
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