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Use of the Company Stamp in Company Business Operations

Shareholders’ Right to Derivative Action Under the Companies Act of the Republic of Serbia

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Companies are not obliged to use the stamp while doing business, as stated in Article 15 paragraph 1 of the Company law of Montenegro ("Company Law"). The legislator’s intention when prescribing freedom while regulating use of stamps in doing business was to unburden the Company’s business, i.e. to not burden the business with additional formal conditions, as well as to leave the issue of the use of the stamp to the company to regulate it by a general or special internal act.

In Article 114 of Company law, it is defined what must be included in the articles of association (“AoA”) of a joint stock company, i.e. a limited liability company, in paragraph 1, item 13, it is made clear that the AoA contains other provisions of importance for the functioning of the company.

If a company decides to further protect its business with third parties and to start using the stamp in its regular business, it shall enter such information on the use of stamps in the company's AoA.

If the company subsequently decides on the use of the stamp, within 7 days from the date of the change, the Company is obliged to submit the documentation and data on changes in relation to the AoA and a special act, i.e. the Act on incorporation, to the Central Registry of Business Entities ("CRBE").

Thus, there are two possible situations in which: (i) the company provides for the use of stamps in the AoA and (ii) the company does not provide for the use of stamps.

In the first case, when a company has provided for the use of a stamp in the AoA, such a provision is considered as an imperative natured provision and the company is obliged to use the stamp in business operations without exception, i.e. arbitrariness in the use of the stamp is not allowed. When the AoA defines the use of stamps, additional protection is given to the legitimacy of the signature and actions in legal transactions. In this case, the company may refer to the use of the stamp in business and other transactions with third parties, provided that the stamp information is duly registered in the CRPS and published in the Official Gazette of Montenegro.

If the company does not provide for the use of the stamp in the AoA, then it is definite that the use of the stamp is not allowed, since the general internal act does not define its use. As in the case when the use of a stamp is provided for in the AoA, it is also not allowed in this case to apply the stamp arbitrarily in business transactions with the third parties, i.e. it is not allowed for the company to sometimes use and sometimes does not use the stamp in a situation when the Company has not provided for the occurrence of any kind of stamp.

In both cases, whether the company (does not) decides to prescribe a provision on the use of stamps in the AoA, there is an explicit obligation for the company to be consistent in the application of what is in the AoA, i.e. that if it has provided for the application of the stamp, it regularly uses the stamp in the legal affairs and business operations, as well as in a situation when the use of the stamp is not provided so that it does not appear in legal transactions,  nor to certify the documentation with any stamp.

By Amra Ademovic, Partner, JPM & Partners

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