Closure or shutdown of a business firm in Serbia is a process that is more complicated and time lasting than the process of opening a company in Serbia – especially for foreign nationals who, for example, want to close their inactive Serbian company after moving abroad, such as relocating to other country.
While opening a company can be streamlined with services like choosing a business name and opening company bank accounts, the process of closing one requires more legal and procedural involvement.
There are few ways how the company can be closed and those ways include:
- voluntary liquidation;
- compulsory liquidation;
- bankruptcy procedure;
- status changes.
In this guide, we will walk you through every step of company closure in Serbia in, highlighting legal obligations, documents, costs, and common pitfalls to avoid and explain how to shut down a business in Serbia legally.
When and why to close a business in Serbia
Business owners in Serbia may decide to shut down their operations for a variety of reasons:
- Financial difficulties or long-term unprofitability;
- Strategic decisions such as entering new markets;
- Switching legal forms from LLC to Sole entrepreneurship;
- Personal reasons such as retirement or relocation;
- Mergers or acquisitions.
Understanding the rationale behind the closure is essential not just from a business standpoint, but also because different reasons might dictate different legal pathways.
Key types of business closure in Serbia
There are several methods of business closure, each with different legal implications:
- Voluntary liquidation – initiated by the company owner(s);
- Compulsory liquidation;
- Bankruptcy – in cases of insolvency;
- Status changes – in cases of mergers or acquisitions;
Each of these types carries distinct administrative and financial consequences. Choosing the right one depends on your company’s specific situation.
Step-by-Step guide for voluntary company liquidation
Firstly, it is important to understand that the voluntary liquidation is possible only when the company has sufficient assets to settle all of its liabilities. Therefore, this way of closure of business firm is not related to the insolvency nor it is conducted in a situation where company does not have enough assets to settle all obligations.
Here are the obligatory steps when it comes to the procedure of voluntary liquidation:
Decision on liquidation and registration
The shareholders or sole owner issues a decision to initiate liquidation. Such decision then must be registered within Serbian Business Registers Agency (APR). Upon registration of the decision and publication of an advertisement on the initiation of liquidation it is considered that the liquidation has begun.
Appointment of liquidator
By decision on initiation of liquidation, a company appoints a liquidator. Liquidator is a person appointed to handle the liquidation process on behalf of the company. In practice that means that representatives of company do not have anymore any representation rights, but that the company is now represented by the liquidator.
Also, it is possible that few liquidators are appointed and in that case they represent company jointly.
Notification and public announcement
A notice on initiation of liquidation is published on the APR website, during a period of 90 days.
Why is this notice extremely important? It contains invitation to creditors to file their claims and warning that they will be precluded if they fail to do so within a deadline of 30 days after expiration of 90 days period.
Therefore, it is extremely important for creditors to submit their claims timely in order to avoid preclusion.
Individual Notice to Known Creditors
Liquidator is obliged to send a written notice of the initiation of liquidation of the company to known creditors.
Such notice liquidator must send at the latest within a term of 15 days from the day of commencement of the liquidation of the company.
Filing of Claims
A company in liquidation shall enter all received filings of claims and compile a list of recognized and disputed claims.
Also, a company may, within a term of 30 days from the day of receipt of the filed claim, contest the creditor’s claim, in which case it shall notify the creditor thereof, within the same term, with explanation of the reasons for contesting the claim.
Final accounting and reporting
The liquidator compiles an initial liquidation balance sheet within a term of 30 days from the day of commencement of liquidation, and within the same deadline submits it to the general meeting of the company for adoption.
The liquidator also prepares an initial liquidation report which includes the following:
- List of filed claims;
- List of recognized claims;
- List of challenged claims with explanation of reasons for challenging;
- Information on whether the assets of the company are sufficient for settling all liabilities of the company, including the challenged claims;
- Necessary actions for the conduct of the liquidation;
- Time envisaged for the completion of liquidation;
- Other facts of relevance for the conduct of liquidation.
Also, during the liquidation proceedings, the liquidator submits annual liquidation reports on his actions, with explanation of reasons why the liquidation proceeds without completion.
Completion of Liquidation
If there are any assets remained after the completion of the liquidation proceedings, i.e. after the settlement of company’s obligations, such assets are distributed to the members of the company.
Also, the liquidator is entitled to reimbursement of costs he incurred during the conduct of the liquidation, as well as to payment of remuneration for his work.
Finally, liquidation process is considered completed by the adoption of the decision on completion of the liquidation. After the liquidation procedure is conducted a company is deleted from Serbian Business Registers Agency.
Closure of a sole proprietorship
A sole proprietorship loses its capacity by deletion from the Serbian Business Registers Agency. Such deletion is conducted due to cessation of business operations.
Cessation of business operations my occur if sole proprietorship stops doing business voluntary – by notice of unregistering or by operation of law.
Sole trader shall cease to conduct business by operation of for example in case of death or loss of legal capacity or due to expiry of time, if doing business was registered for a limited period of time.
From sole proprietorship to LLC?
It is common situation in practice that sole proprietorship is converted to LLC. Namely, that could be done by decision on continuing to performing the activity in the form of a company.
In that case, deletion of the sole trader from the register of business entities is simultaneously executed with the registration of establishment of the company.
Costs and fees of company closure in Serbia
The cost of closing a limited liability company in Serbia can vary depending on the legal form and complexity of the business. Typical expenses include:
- APR fees for submitting applications and public notices;
- Legal fees for preparing closure documentation;
- Accounting fees for compiling and filing final tax reports;
- Costs for publication of liquidation notices.
What happens with employees during closure?
Company liquidation leads to the termination of employment contract of the company’s employees.
In such cases, employees are entitled to assert their rights during the liquidation procedure. If an employee’s contract ends because of the company’s shutdown (whether through liquidation or bankruptcy), they may be eligible for unemployment compensation through the National Employment Service, provided they were continuously insured for at least 12 months, or intermittently within the last 18 months, with any gaps shorter than 30 days still considered continuous.
Understanding the legal implications and ensuring proper registration in the liquidation process is essential to protect employee rights and access available benefits.
Involuntary or forced closure: When the state steps in
In practice there are often situations when Serbian Business Registers Agency initiates a procedure of forced closure, i.e. forced liquidation. It is important to be aware when that can happen, and that it includes following situations:
- Failing to register a new address of the seat of the company: whether it is renting commercial business space of using a service of virtual office in Serbia, it is important to know consequences that may arise in case of deletion of registered address within the Serbian Business Registers Agency.
Namely, interested person may file a lawsuit with the competent court requesting the deletion of the registered address of the company’s seat, if the person who has the right of ownership did not allow the use of the premises where the address of the seat for managing the company’s business is located. In that case, upon completion of court proceedings, when the judgement ordering the deletion of the seat address becomes final, the court delivers it to the Serbian Business Registers Agency.
If the company fails to register new seat address within 30 days, Serbian Business Registers Agency shall ex officio initiate the procedure of compulsory liquidation.
- Failing to change a business name of the company: choosing business name for a company is one of the main segments determined even before establishing a company in Serbia.
However, it is important to be aware of certain restrictions when it comes to the choice of business name. In that regards, a procedure for demanding a change of business name may be initiated and court may render a judgement ordering so. If in this case company fails to change its name within a term of 30 days of the finality of the judgment, Serbian Business Registers Agency, ex officio, launches the proceeding of compulsory liquidation.
Business suspension vs. Closure: Key differences
Business suspension is a better option when the owner plans to resume activity, while closure is final and suitable when permanently exiting the market.
Many entrepreneurs in Serbia choose to temporarily suspend their business activity when facing challenges, financial difficulties, or an unstable workflow. This legal option, referred to as a change in the duration of the sole proprietorship at the Serbian Business Registers Agency (APR), allows registered entrepreneurs to freeze their sole proprietorship without stating a reason.
The process involves submitting a formal application for temporary suspension to the APR. There are no limitations on how long an entrepreneur can keep their business in suspension or how many times they can opt for this status.
When resuming business operations, the procedure is the same as the initial registration – an application to reactivate the activity must be filed. This flexibility makes business suspension a practical solution for entrepreneurs seeking to legally pause operations without closing their company.
Common mistakes to avoid when closing a business in Serbia
Common mistakes to avoid when conducting a procedure of dissolution of business in Serbia:
- Not getting tax clearance before submitting closure;
- Submitting incomplete documentation;
- Improper handling of employee rights and payments;
- Failing to notify creditors or publish notices via Serbian Business Registers Agency;
- Assuming suspension equals closure (it does not).
Who can help? Legal and accounting support
Proper legal and accounting guidance can significantly streamline the closure process. Corporate lawyer in Belgrade (Serbia) can help ensure legal compliance, draft decisions, and advise on labor matters.
Engaging experienced professionals can prevent costly errors and speed up the process.
Conclusion on company shutdown in Serbia and final checklist
Closing a company in Serbia is a legally complex but manageable process—provided all steps are handled correctly and in compliance with local regulations. Whether you are considering voluntary liquidation, cessation of entrepreneurial activity, or facing company shutdown due to insolvency, it is essential to follow legal procedures carefully to avoid future liabilities and ensure all stakeholders are properly informed.
Below is a practical checklist to help you close your business in Serbia properly:
- Decide on the method of closure (liquidation, bankruptcy, etc.);
- Settle all outstanding debts and financial obligations – in case of voluntary liquidation;
- Prepare and submit necessary documentation to the Serbian Business Registers Agency (APR);
- Officially terminate employment contracts and settle employee rights;
- Obtain confirmation of company deletion from APR.
Our law firm offers legal support throughout the entire company liquidation process in Serbia – from the initial planning stages to final deregistration. If you need tailored assistance or have specific questions about your company’s closure, we’re here to help.
This article is for informational purposes only and does not constitute legal advice. If you need additional information regarding the topic in question, please feel free to contact us by email at office@ncrlawyers.com or by phone at +381677049551.
