The Law on Amendments and Supplements to the Company Law (Official Gazette of the RS, No. 91/19) – the application of which commenced on 1 April 2020 – introduces two new legal concepts applicable to limited liability companies:
- a reserved own share; and
- a financial instrument - the right to acquire shares.
Reserved own share shall be a share that a company acquires from (all or some) shareholders and with their consent, for the purpose of distribution of financial instruments - the rights to acquire shares.
A company may possess several reserved own shares, whereby each reserved own share is assigned a separate identification number at registration. More information on registration of a reserved own share in the Business Entities Register is available here.
The financial instrument - the right to acquire shares - shall be issued by a company to one or more persons, from its reserved own share. This instrument enables the person to whom the financial instrument has been issued to acquire a share in the company under preferential conditions (price) after the expiration of a certain period of time (stated in the resolution to issue the financial instrument). The holder of the right to acquire shares shall be registered in the Central Registry (Central Securities, Depository and Clearing House).
After the due date of the right to acquire shares and payment of the agreed price, the exercise of the right to acquire shares shall be realized by striking the financial instrument off the Central Registry, while the legal holder of the financial instrument shall be registered as a shareholder in the Register of Business Entities simultaneously with registration of the reduction of the reserved own share. More information on registration of the shareholders who have exercised their right to acquire shares is available here.