You have decided to start your own business, but then the question arises from where to start and what is the next step that awaits you. Registering your company in the Business Registers Agency is definitely first on the list of things you need to do in this process.
Business Startup Process
When it comes to the process itself, it’s always best to entrust the process of opening a business to an agency that has experience in the company registration process. Consultations with experts can help you avoid mistakes and complete the entire process quickly and easily.
Decisions you need to make before starting a business include:
• Choosing a company name
What does a business name need to contain? It’s a question of the company’s name, legal form of the company, and the location where the company’s registered headquarters is located. The recommendation is to check on the Business Registers Agency website before submitting the registration application for establishment to see if the desired name for your company is free, and if it is, to make a reservation for the name.
• Selection of activity code
All legal entities and business entities are required to choose their activity code – that is, the activity they will engage in. This implies the obligation to indicate the main activity of the company when submitting the application for establishment – i.e., the business that the company will primarily and most carry out in order to make a profit. There are also secondary activities, which are other business activities that the legal entity may engage in (if there are no legal restrictions).
The activity code is important because of the obligation to record transactions through a cash register, and some activities are exempt from cash registers.
• Company address – virtual office
To avoid additional costs, you can choose a virtual office. A virtual office is a modern and very effective concept of business, as instead of renting expensive business premises in prestigious locations, it is possible to rent a virtual office and register the company’s headquarters at that address, regardless of the location of the business.
Legal forms of the company
After the aforementioned steps, the choice of the legal form of your business entity follows. There are several legal forms:
• Entrepreneurs
• Partnership
• Limited liability company – LLC
• Joint-stock company
The most common forms of organization of business entities in Serbia are self-employed and LLC and these two forms are represented in 99% of cases in Serbia.
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Basic differences between self-employed and LLC
When it comes to the basic differences between the two most common forms of organization of business entities in Serbia, it is a question of the following differences:
1. The entrepreneur is responsible for the entire assets for their business activities as well as assets acquired from conducting the business, while the owner of a limited liability company (LLC) is only responsible with the assets registered under the company, up to the amount of their contribution.
2. An entrepreneur is a physical person who is registered with the Business Registers Agency to conduct business activities. Entrepreneurship represents a form of business registered by only one physical person, including all unemployed persons and those in employment. In the latter case, they are registered as an entrepreneur in employment. A limited liability company can have one or more founders. In the case of multiple founders, each founder of the company owns a portion of the company expressed in percentage and totaling 100%. The initial capital consists of the starting contribution for the establishment of the company which can be in the form of money, goods, rights, securities, etc. The rule is that the shares of the company’s members are distributed proportionally to the shares in the initial capital, although this can be defined differently in the founding act. The minimum amount of initial capital for a limited liability company is 100 RSD.
3. The tax on profit for entrepreneurs at the end of the year is 10%, while for a limited liability company it is 15%. This tax is calculated on the net profit before taxation, i.e. the difference between total revenue and expenses in one calendar year.
Registration of companies in the Business Register Agency
Registration of companies in the Business Registers Agency
The process for registering an entrepreneur and establishing a limited liability company in Serbia is not the same, and the difference is mainly in the documentation submitted for registration.
The registration of an entrepreneur in the Business Registers Agency is a simple procedure as the entrepreneur is a physical person registered to conduct business activities. The procedure for establishing a limited liability company is more complex and requires more documentation.
The establishment of a company begins with the entry of the company in the business register and the submission of the registration application on the prescribed Business Registers Agency form. Since 2018, the Business Registers Agency has the possibility of electronic registration of entrepreneurs and the establishment of limited liability companies on its website. The registration process is considered initiated on the day the registration application is submitted to the Agency.
The electronic application for the establishment of an entrepreneur or limited liability company can be submitted by the future entrepreneur (physical person) / member of the company or a person authorized to sign on behalf of the future member of the company. To submit the application for the registration of the company, it is necessary for the founder to have a valid ID card and electronic signature.
The Business Registers Agency decides on the application within 5 working days from receipt and either accepts or rejects it.
What are the steps after registration in Business Registers Agency?
Here is a list of necessary activities after registering in Business Registers Agency:
1. Stamp – The use of a stamp is no longer a requirement for companies due to changes and amendments to the Companies Act on October 1, 2018. However, if you decide to proceed with this step, the stamp can be made at a stamp maker, and you need a resolution from Business Registers Agency regarding the registration of the company to make it.
2. Opening a bank account – The registration of a company also implies the obligation to open a bank account. Before opening an account, it’s important to gather information about the bank’s service fees, services offered to clients and how these services meet your business needs. The account opening process usually takes up to three days, depending on the bank.
3. Tax registration – After the aforementioned steps, it’s necessary to submit a tax registration within 15 days to be registered as a new tax payer. Sole traders and DOOs are required to submit a tax registration. It’s also important to note that, if you have decided to register as a sole trader, you must decide on a tax model. There are two tax models for sole traders, which are flat-rate taxation and keeping business books (personal income).
Although the process doesn’t take much time, it’s important to have it carried out by a professional to avoid potential errors and problems. In this regard, it’s always recommended to have an authorized person for your company to ensure that all administrative and record-keeping tasks are properly carried out for tax registration purposes.
