Liquidation of a limited liability company in Serbia – Procedure and Deadlines

07.08.2026.

The termination of a company’s business activity is a legal act which, in order to produce full legal effect, must be carried out in accordance with the provisions of the Law on Business Companies. Liquidation represents the statutorily regulated procedure for the termination of existence of a limited liability company (LLC), which is conducted before the Serbian Business Registers Agency (hereinafter: the “SBRA”) and concludes with the issuance of a decision deleting the company from the register.

Concept and Preconditions for Liquidation

Liquidation is a procedure intended exclusively for solvent companies – those whose assets are sufficient to fully settle all creditors. Should it be established in the course of the procedure that the company’s assets are insufficient to settle all claims, the liquidation administrator is obligated by law to file a proposal for the initiation of bankruptcy proceedings before the competent court.

The fundamental distinction from bankruptcy lies in who initiates the procedure and on what grounds:

• Liquidation is initiated by the company’s founders, on the basis of their own decision, when they opt for the termination of business of a company that is solvent.
• Bankruptcy is initiated where a company is unable to settle its due obligations toward creditors, whether upon the proposal of creditors or of the company itself.

Voluntary and Compulsory Liquidation

The Law on Business Companies distinguishes between two forms of liquidation.

Voluntary liquidation is carried out on the basis of a decision of the company’s general meeting, where the members decide that the company shall cease operations, provided that it is capable of settling all of its obligations toward creditors.

Compulsory liquidation is initiated by the SBRA ex officio, in the cases prescribed under Article 546 of the Law on Business Companies, where the company fails to fulfil its statutory obligations. Where the ground for liquidation is remediable, the company is granted a deadline to remedy the irregularity; where the ground is non-remediable, the procedure is initiated without a prior deadline.

The distinction between these two forms of liquidation is of particular significance from the standpoint of members’ liability. In voluntary liquidation, the liability of members is limited to the amount of the liquidation surplus received. By contrast, in compulsory liquidation, the controlling member of the company may, under the conditions prescribed by the Law on Business Companies, bear joint and unlimited liability for the company’s outstanding obligations even after its deletion from the register.

Course of the Regular Liquidation Procedure

The regular liquidation procedure comprises the following stages:

1. Adoption of the liquidation decision. The general meeting of the company adopts a decision to initiate the procedure and appoints a liquidation administrator. Upon the appointment of the liquidation administrator, the authority of the previous legal representatives of the company ceases.
2. Registration of the decision and publication of the notice. The decision is registered with the SBRA, which subsequently publishes a notice of the initiation of liquidation on its website. The date of publication of the notice is deemed the commencement of the liquidation procedure, from which all subsequent deadlines run.
3. Deadline for creditors to file claims. As of the date of publication of the notice, a 90-day period begins to run, within which creditors may file their claims against the company.
4. Preparation of the opening liquidation balance sheet. The liquidation administrator is obligated to prepare the opening liquidation balance sheet, as an extraordinary financial statement, within 30 days of the commencement of the procedure.
5. Settlement of creditors. The company in liquidation continues to settle its due obligations toward creditors, employees, and in respect of public revenues.
6. Assessment of solvency. Should over-indebtedness of the company be established, the liquidation administrator is obligated to file, without delay, a proposal for the initiation of bankruptcy proceedings.
7. Distribution of the liquidation surplus. Following the settlement of all creditors, the remaining assets are distributed among the members of the company in proportion to their equity interests.
8. Preparation of the final report and deletion from the register. Upon completion of the liquidation procedure, the liquidation administrator prepares a final report, on the basis of which the SBRA issues a decision deleting the company from the register.

The law prescribes that the regular liquidation procedure shall last at least 120 days, given the mandatory 90-day period for the filing of creditors’ claims, increased by the time required for the preparation and submission of documentation. In practice, the procedure is most commonly concluded within a period of six to twelve months, depending on the scope of the company’s operations, the number of creditors, and the orderliness of its business records.

The Significance of Tax Clearance Certificates in the Liquidation Procedure

Of particular significance in the course of the procedure is the obtaining of certificates confirming the settlement of tax liabilities, from both the Tax Administration of the Republic of Serbia and the competent local tax administration. Without these certificates, the SBRA will not issue a decision deleting the company from the register, irrespective of the fact that all other stages of the procedure have been duly completed.

The certificate issued by the Tax Administration pertains to the settlement of obligations in respect of public revenues assessed and collected at the national level (VAT, corporate income tax, social security contributions, etc.), while the certificate issued by the local tax administration pertains to the settlement of obligations in respect of local public revenues (such as property tax). Given that the issuance of these certificates is conducted through separate administrative bodies and itself requires a certain amount of time, the timely filing of requests for their issuance is of essential importance to the overall dynamics of the liquidation procedure – delay in obtaining tax clearance certificates is among the most common reasons for the extension of liquidation beyond the statutory minimum duration.

Status of Employees and Distribution of Assets

The initiation of liquidation proceedings entails the obligation to resolve the employment status of employees, in accordance with the provisions of the Labour Law, as well as to settle all obligations in respect of salaries and contributions prior to the conclusion of the procedure. Assets remaining after the settlement of all creditors are distributed among the members of the company in proportion to their equity interests.

This text is of an informative nature and does not constitute legal advice for any specific case. For an analysis of your specific situation, please consult an attorney.