Legal certainty for businesses, market stability, and simpler procedures are among the key benefits under Chapter 6 – Company Law, which could be provisionally closed by the end of the year, announced the Head of the Negotiating Group, Renata Milutinović.
“Although our work does not end with closure, we are looking forward to the provisional closing of this chapter with great attention and optimism. It is expected to happen by the end of the year — very soon,” Milutinović stated in an interview with the Mina-business agency.
Regarding the main benefits of closing the chapter, she noted that the first relates to legal certainty.
“This means that every entrepreneur knows the rules of the market, and can therefore invest and expand operations more easily, create new jobs, communicate with potential investors, and run their business successfully,” Milutinović explained.
The next benefit, she said, concerns stability, which arises from a clear legal framework equal for everyone. “This means that investors can recognize a market that operates stably and provides equal rules for all participants, functioning in the same way as the EU market,” she added.
Easier adjustment of businesses to the European market is, she noted, the third major benefit, enabling companies to enter business arrangements with any EU firm more simply and efficiently.
“Additional benefits include electronic registration of business entities, which means faster procedures and lower costs,” Milutinović said, adding that advantages can also be seen in improved corporate governance and the protection of minority shareholders and small investments.
She stated that Chapter 6 is important for all entrepreneurs, companies, investors, and citizens, because it defines the rules applicable to all market participants, from large corporations to small and medium-sized enterprises and individual entrepreneurs. These rules specify the methods of establishing companies, their functioning, financial reporting, and audit procedures.
“Therefore, the chapter defines all rules from the moment a company is established to the moment of financial reporting, and represents the foundation of modern business practices. This chapter is extremely important for the entire economy because it sets rules that will be equal for everyone,” Milutinović explained. This, among other things, means that Montenegrin businesses, once the standards prescribed by the new legislation are adopted, can operate more easily both domestically and on the EU market, since the rules are harmonized.
Milutinović stated that Chapter 6, opened on 18 December 2013, encompasses three major areas, the first being company law — rules for establishing, registering, and operating companies.
“The next major area concerns the capital market, which implies alignment with EU rules in accordance with the directives on transparency and the takeover of joint-stock companies,” she said.
She added that the third major area relates to accounting and auditing, where Montenegro was required to align with European standards for financial reporting, audit procedures, and oversight. The necessary laws have been adopted, and now their implementation follows, she noted.
“Montenegro has, in our view, fulfilled all the criteria prescribed by the closing benchmarks. What is most important is that when all these criteria and rules set out in the new legislation come together, we get a new, well-regulated market where companies operate transparently and investors receive timely information and protection of their investments,” Milutinović explained.
She announced that government representatives would hold consultations with the business community today, present the novelties in the Company Law, and address any uncertainties. Milutinović also announced that on 27 November, an event will be held at the Chamber of Commerce where businesses will be able to ask questions about all outstanding issues and learn more about the benefits introduced by Chapter 6.
Milutinović stated that the Corporate Governance Code, expected to enter into force on 1 January, is crucial for all large companies, as it introduces new standards for how large enterprises operate, organize internal activities, and behave in the capital market, including stock exchanges.
“These are entirely modern and up-to-date business conditions and rules that we must adopt, in line with our commitment to functioning as a single market,” Milutinović said. She added that negotiations on Chapter 6 were demanding and not an easy task.
The work on harmonization and shaping the framework of company law in Montenegro was carried out, she said, by a team composed primarily of representatives from the Ministry of Economic Development and the Ministry of European Affairs. “A major contribution was also made by colleagues from the Ministry of Finance, the Tax Administration, the Capital Market Commission, as well as the Chamber of Commerce, the Employers’ Union, the Faculty of Economics, the Institute of Accountants and Auditors, and certified accountants. A truly dedicated team that gave its maximum effort so that today we can speak with satisfaction about the provisional closure of this chapter,” Milutinović concluded.