Corporate Governance 2023 Comparisons

The principal and the most frequently used legal forms of corporate organisations under Montenegrin Law on Business Organisations are capital companies and, in particular, the joint stock company and the limited liability company.

The joint stock company (akcionarsko društvo) may be established by one or more individuals and/or legal entities in the capacity of shareholders whose share capital is determined and divided into shares. The minimum founding capital of a joint stock company amounts to EUR25,000.

On the other hand, the limited liability company (društvo sa ograničenom odgovornošću) may be established by one or more individuals, as well as by legal entities in the capacity of members, and it is mostly used for small and medium-sized businesses. The founding capital of limited liability company is divided into stakes and the minimum founding capital amounts to EUR1.

Besides the previously mentioned capital companies, Montenegrin Law on Business Organisations also recognises companies such as partnership and limited partnership, as well as additional forms of commercial activity performers including entrepreneurship and as part of a foreign company.

The Montenegrin Law on Business Organisations, LBO (Official Gazette of Montenegro, Nos 65/2020 and 146/2021) is the principal source of law regulating the corporate governance requirements and regulates all forms of business organisations existing in Montenegro.

Furthermore, Montenegrin Law on Capital Markets, LCM (Official Gazette of Montenegro, No 1/2018) provides regulation of the capital market.

The principal sources of corporate governance requirements for companies with publicly traded shares are LBO and LCM, according to which any capital company may, if it deems necessary, adopt a Corporate Governance Code. Adoption of a Corporate Governance Code is not obligatory under Montenegrin law and it is a matter of the company’s choice. The Montenegro Stock Exchange (Montenegroberza) is the only Montenegrin stock exchange.

The governance requirements for a public joint stock company are practically the same as for a private joint stock company, with a few exceptions. Namely, for a joint stock company with publicly traded shares LBO provides some additional mandatory governance requirements in respect to minimum number of members of the board of directors and independent members of the board of directors, as well as a minimum number of members of the supervisory board and number of independent members of the supervisory board, as specified in more detail in 4.1 Board Structure.

As to the governance requirements for public limited liability companies, the governance requirements provided by the law for a joint stock company shall apply accordingly to public limited liability companies. In addition, the LBO provides the same governance bodies and structure for both a public joint stock company and a public limited liability company.

In addition to the above-mentioned rules and requirements, there are no particular key or topical corporate governance rules and requirements to be drawn out in the Montenegrin jurisdiction.

The Russian sanctions regime had the impact on internal decisions of the banks where the banks often deny opening the bank accounts for Montenegrin legal entities founded by Russian citizens or Russian legal entities.

There are no developments in green/sustainability reporting.

The issue of sustainable development is regulated by Montenegrin Environmental Law, EL (Official Gazette of Montenegro, No 52/2016, 73/2019 and 73/2019, which does not provide legal requirements in relation to mandatory reporting of ESG issues. However, the EL provides obligation for the companies to (at the request of the Environment Protection Agency of Montenegro) submit data and information for the purposes of maintenance of the unified Environmental Information System.

Moreover, there are some general rules and requirements for companies provided in order to ensure the sustainable use of natural resources as a basic condition for sustainable development. The general obligations of legal entities in respect to sustainable development consist in the protection of the environment through:

• sustainable use of natural resources, goods and energy;
• introduction of more energy-efficient technologies and use of renewable natural resources;
• the use of products, processes and technologies that pose less threat to the environment;
• taking measures to prevent and eliminate the consequences of endangerment and damage to the environment; and
• control of activities and operation of installations that may pose a risk or cause danger to the environment and human health.

In addition, EL provides obligation in relation to the rational use of natural resources, cost-accounting based on environmental protection within investment and production costs, application of regulations and taking environmental protection measures in accordance with the law and other applicable regulations.

In addition to the above, various forms of ESG reporting are provided exclusively for companies dealing with environmental and industrial activities.

In accordance with Montenegrin LBO, the governance and management of a joint stock company may be organised as unicameral or bicameral.

The bodies of a joint stock company in unicameral governance are:

• general meeting of shareholders;
• board of directors;
• chief executive officer (CEO).

On the other hand, the bodies of a joint stock company in bicameral governance are:

• general meeting of shareholders;
• supervisory board; and
• management board.

Management bodies of a joint stock company in unicameral governance are represented by the board of directors and CEO while management bodies of a joint stock company in unicameral governance are represented by the supervisory board and management board.

A joint stock company may have a company secretary appointed by the board of directors (in unicameral organisation) or the supervisory board (in bicameral organisation) and is required to appoint an independent and authorised auditor.

The essential difference between unicameral and bicameral governance is existence of a special body in the bicameral governance represented by the supervisory board whose task is to control whether the director/s implement the decisions made by the general meeting of shareholders.

The governance bodies of a limited liability company are much simpler than governance bodies of a joint stock company and are represented by the general meeting of shareholders and the CEO, while the articles of association may also determine other management bodies in accordance with the law. It is to be pointed out that a limited liability company may also introduce a more complex management structure, prescribed by provisions that regulate joint stock companies.

In addition, the public limited liability companies are obliged to have management bodies of public joint stock companies. The same applies to a limited liability company that is considered as a large legal entity in accordance with the law governing accounting, and this type of limited liability company is obliged to have management bodies as a joint stock company.

Notwithstanding the above, in the case of a one-member limited liability company, the general meeting of shareholders does not represent the mandatory body of the company.

General Meeting

The general meeting of a joint stock company consists of all shareholders. Members of the board of directors and the executive director (in the case of a unicameral joint stock company), or members of the supervisory and management board (in the case of a bicameral joint stock company), as a rule attend the general meeting of the joint stock company.

The general meeting makes decisions in respect to:

• adoption of the company's articles of association;
• changes and amendments to the company's articles of association;
• electing members of the board of directors – ie, the members of the supervisory board – and appointing the auditor;
• dismissal of members of the board of directors – ie, members of the supervisory board – and auditors;
• appointment and dismissal of the liquidator;
• the remuneration policy, as well as the amount of remuneration of the members of the board of directors – ie, the members of the supervisory and management boards, at each regular annual session;
• adoption of the annual financial statements and the report on the company's operations;
• disposal of the company's assets (purchase, sale, lease, exchange, acquisition or other disposal) whose value exceeds 20% of the book value of the company's assets (high-value assets), unless the articles of association determine a lower share;
• the distribution of profits;
• increases or decreases of the share capital of the company determined by the articles of association and replacement of shares of one class with shares of another;
• voluntary liquidation of the company, restructuring or submission of proposals for initiating bankruptcy proceedings;
• approval of the assessment of non-monetary deposits;
• issues within the competence of the board of directors or supervisory board related to the company's operations;
• approval of the conclusion of an agreement on the purchase of property from the founder or majority shareholder of the company, when the payment exceeds one-tenth of the share capital of the company determined by the articles of association and when the agreement should be concluded within two years of registration;
• the issue of bonds – ie, convertible bonds or other convertible securities;
• limiting or revoking the priority right of shareholders to subscribe for shares or acquire convertible bonds, with the consent of a two-thirds majority vote of the shareholders to whom the decision applies;
• independent or joint establishment of another company or a decision authorising the management bodies in the company to make a decision on independent or joint establishment of one, more or an indefinite number of companies;
• adoption of procedural rules; and
• all other decisions in accordance with the company's articles of association.

Board of Directors

The board of directors has at least three members. Notwithstanding, the board of directors of a public joint stock company shall have at least five members. The number of members of the board of directors is determined by the company's articles of association and must be odd. The members of the board of directors shall be elected for a period determined by the articles of association, which may not exceed four years. The board of directors must have at least one-third independent members, and the board of directors of a public joint stock company must have at least two-fifths independent members.

The board of directors makes decisions in respect to:

• management of the company;
• the internal organisation of the company and act on systematisation;
• appointment of the CEO and secretary of the company, as needed;
• determination of the business strategy in accordance with the guidelines of the general meeting;
• determination of the company's accounting policies and risk-management policies;
• appointment of persons in charge of conducting internal audit in the company, at the proposal of the audit board, if formed in the company;
• convening sessions of the general meeting and determination of the proposed agenda with proposed decisions;
• determination of the amounts of dividends which, in accordance with this law, the articles of association and the decision of the general meeting, belong to certain classes of shareholders, as well as the manner and procedure of their payment;
• execution of the decisions of the general meeting;
• proposing the remuneration policy to the members of the management body;
• giving and revoking the power of attorney;
• adopting quarterly reports of the CEO on the company's operations; and
• other tasks in accordance with this law and the articles of association.

The CEO

The CEO is appointed by the board of directors of the company and may not be a member of the board of directors, except in the case of a one-member company.

The CEO has an executive role and its authorisations are the following:

• representation of the company;
• conclusion of agreements on behalf of the company;
• organisation and management of the affairs of the company;
• managing the company's assets;
• execution of the decisions of the board of directors;
• deciding on the disposal of the company's financial resources;
• deciding on the rights and obligations of employees in connection with work;
• submission of quarterly reports on the current operations of the company and other reports;
• performing other tasks determined by law and the company's articles of association.

The CEO shall perform the duties of the secretary of the company, if the secretary of the company has not been appointed.

Supervisory Board

The supervisory board has at least three members. Notwithstanding, the supervisory board of a public joint stock company shall have at least five members. The number of members of the supervisory board is determined by the articles of association and must be odd.

The supervisory board makes decisions in respect to:

• determination of the business strategy of the company and monitoring its implementation;
• appointment of the members and the president of the board of directors, as well as the secretary of the company, if such exists in the company;
• adopting the reports of the board of directors on the operations of the company, determining the financial reports of the company and the assembly for adoption;
• giving and revoking the power of attorney;
• appointment of the company's internal auditor;
• convening sessions of the assembly and determination of the proposed agenda;
• the acquisition of own shares, in accordance with this law;
• proposal to the general meeting of a policy of remuneration to governing bodies;
• election of the president of the supervisory board;
• submission of reports to the general meeting; and
• performance of other tasks in accordance with the LBO and the articles of association.

Management Board

The management board has at least three members. The number of members of the management board is determined by the articles of association and must be odd. Members of the board of directors are appointed by the supervisory board, in accordance with the company's articles of association. The members of the management board shall be appointed for a period determined by the articles of association, which may not be longer than four years.

The management board has an executive role and its authorisations are the following:

• management of the affairs of the company;
• determination of the internal organisation of the company, with the consent of the supervisory board;
• supervision of the keeping of the company's business books and the preparation of the company's financial statements;
• proposition of the agenda for the sessions of the company's assembly to the supervisory board;
• calculation of the amount of dividends, determining the day, procedure and manner of their payment, in accordance with the decisions of the general meeting;
• execution of the decisions of the assembly and the decisions of the supervisory board;
• submission to the supervisory board of quarterly reports on the current operations of the company; and
• performance of other tasks and making decisions in accordance with this law, the statute, decisions of the assembly and the supervisory board.

The general decision-making powers of the general meeting in a limited liability company consist of making decisions in respect to:

• amendments to the founding act and articles of association;
• increasing and decreasing the share capital of the company, as well as on each issue of securities;
• distribution of profits and the manner of covering losses, including determination of the day of acquiring the right to share in the profit and the day of payment of the share of profit in the members of the company;
• initiating liquidation proceedings, restructuring, as well as on submitting proposals for initiating bankruptcy proceedings by the company;
• the acquisition of own shares;
• the request for resignation of a member of the company;
• the exclusion of a member of the company due to non-payment – ie, failure to enter the registered deposit;
• initiation of a dispute for expulsion of a member of the company;
• initiation of the procedure and granting a power of attorney to represent the company in a dispute with the procurator, as well as in a dispute with the CEO;
• initiation of proceedings and granting a power of attorney to represent the company in a dispute against a member of the company; and
• changes in the form of organisation of the company.

Pursuant to LBO, the sessions of the general meeting of shareholders may be ordinary or extraordinary. A joint stock company is obliged to hold an ordinary assembly at least once a year. The first annual session of the general meeting of shareholders must be held within 18 months of the founding general meeting of the company, and after that the general meeting is convened once a year. The ordinary annual general meeting of shareholders is held within six months from the end of each business year, except for the first year since the establishment of the company.

The notice on convening the general meeting of shareholders shall be submitted no later than 30 days before the day of holding the general meeting. The general meeting of shareholders may not make decisions on issues that are not on the agenda, unless all shareholders with voting rights attend the general meeting and unanimously accept the change in the agenda. In the event of a change or extension of the agenda, shareholders shall be notified of changes to the agenda in the manner in which they are notified of the holding of the general meeting of shareholders and no later than ten days before the day of the general meeting session.

The presence of shareholders or their representatives at the general meeting of shareholders shall be proven by signing the list of attendees, which shall also show the number of votes held by each shareholder.

The general meeting of shareholders is chaired by the CEO – ie, the president of the management board – unless otherwise decided by the majority of present or represented shareholders. The secretary of the company is the secretary of the general meeting of shareholders. In the absence of the secretary of the company, the president of the general meeting appoints another person as the secretary of the session of the general meeting.

The quorum of the general meeting of shareholders consists of shareholders who own more than half of the total number of shares with voting rights, and who are present, are represented by representatives or have voted by ballot.

After voting on each individual decision, the president of the session shall inform the general meeting of the votes "for" or "against" of the present shareholders with voting rights, as well as of the voting of shareholders who did so in writing. The company is obliged to publish the exact results of voting on individual decisions on its website within 15 days from the day of holding the general meeting. The general meeting shall make a decision by a majority vote of the shareholders present or represented or who voted by ballot, except in cases when a second majority is required to make a decision.

An "extraordinary assembly" is convened if:

• shareholders who hold at least 5% of the voting rights submit a written request for holding the general meeting;
• the board of directors – ie, members of the supervisory board or shareholders – propose:
1. a change of the activity of the company;
2. a change of the share capital of the company;
3. a change of the auditor before the expiration of the term for which the auditor was elected; or
4. a change of a member of the board of directors – ie, a member of the supervisory board – before the expiration of their mandate;
• there are large losses of the company or the allowance of the company to buy its own shares is needed;
• reorganisation, merger, voluntary liquidation or submission of a proposal for initiating bankruptcy proceedings of the company is approved;
• this is required by the resigned auditor;
• there is termination of membership in a member of the board of directors or supervisory board; or
• the board of directors – ie, the supervisory board – considers that a certain issue should be considered at the extraordinary general meeting of shareholders.

The joint stock company shall, within three days from the day of the end of the general meeting of shareholders, publish on its website the adopted decisions and voting results on all items on the agenda.

The session of the board of directors may be scheduled by the president of the board of directors in person or at the request of a member of the board of directors. If the president of the board of directors does not convene a session of the board of directors upon such request, within 30 days from the day of submitting the request, the session of the board of directors may be convened by any member. A member of the board of directors who convenes a session shall state in the request the reasons for convening the session and propose the agenda. 

The session of the board of directors may be held if more than half of the members are present, and decisions shall be made if at least half of the present members of the board of directors vote for them. The members of the board of directors have the same right to vote, and in the case of an equal number of votes, the vote of the president of the Board of Directors is decisive.

According to LBO, the rules prescribed for the decision-making process of the board of directors shall apply accordingly to the decision-making process of the supervisory board and the management board.

When it comes to the sessions of the general meeting in the limited liability company, they may be held by using a conference call or other audio and visual communication equipment, in such a way that all persons participating in the work of the session can communicate with each other at the same time. A member of the company may vote by letter as well, unless otherwise determined by the founding act, the articles of association or procedural rules of the general meeting.

Decisions of the general meeting may be made without a session as well, if signed by all members of the company with voting rights.

The board of directors has at least three members. Notwithstanding, the board of directors of a public joint stock company shall have at least five members. The number of members of the board of directors is determined by the company's articles of association and must be odd. The members of the board of directors shall be elected for a period determined by the articles of association, which may not exceed four years. The board of directors must have at least one-third independent members, and the board of directors of a public joint stock company must have at least two-fifths independent members.

The members of boards of directors have all the same role, with exception of the president of the boards of directors who is elected from among the members of the board of directors.

The additional roles of the president of the boards of directors are: (i) conclusion of the employment agreement with the CEO and the secretary of the company; and (ii) convening and chairing sessions of the board of directors, proposal of the agenda and responsibility for keeping the minutes from the sessions of the board. The particular role of the president of the boards of directors in respect to decision-making process is provided in 3.3 Decision-Making Processes.

Please see 4.1 Board Structure in which a board of directors' composition requirements are described.

The general meeting of shareholders is competent for appointment and dismissal of members of the board of directors as well as members of a supervisory board.

The board of directors is competent for appointment and dismissal of the CEO and secretary of the company.

The LBO prescribes that the board of directors must have at least one-third independent members, and the board of directors of a public joint stock company must have at least two-fifths independent members.

An independent member of the board of directors is considered to be a person who is not a relative in the direct line, a relative in the collateral line, concluding with the second degree of kinship, marital and extramarital spouse of other members of the company's management body – ie, shareholders who have a significant or majority share in the share capital – and a person who in the period of at least two years before the election as a member of the board of directors has not:

• been the majority owner, owner with significant share in the share capital, member of the management body, except the body to which they are elected, procurator, person employed in the company within whose body they are elected or in another company related to that company; or
• received or claimed from the company body in whose bodies they are elected, or from companies related to that company, a fee whose total value exceeds 10% of the annual income of that person.

In the event of a board member failing to comply with any of requirements stated above, the mandate of that member in the board of directors shall stop.

The CEO, members of the board of directors, members of the management board and members of the supervisory board have special legal duties towards the company, such as:

• duty of care;
• declaration of personal interest;
• avoidance of conflict of interest;
• protection of business secrets; and
• respect for the prohibition of competition.

The special legal duties are owed by directors to the company (ie, shareholders of the company).

In cases of breach of special legal duties to the company by persons who have the obligation to respect them, the company has the possibility of filing a lawsuit and accordingly seeking compensation and, in the determinate cases, transfer of benefits realised by that person to the company (ie, related person as a consequence of breach of duty and exclusion of the person from the company, if that person is a member of the company).

The members of the board of directors shall be liable for the damage caused to the company. Notwithstanding, the members of the board of directors are not responsible for the damage to the company that occurs as a result of the implementation of the decisions of the general meeting of the company.

If the damage occurs as a result of a decision of the board of directors, the members of the board of directors who voted for that decision shall be liable for the damage.

The same rules apply for members of the management board and supervisory board.

Furthermore, the members of the management body of the merging company are responsible for the damage they cause to the company (ie, to the shareholders of the company in the merger process).

The general meeting of the shareholders is authorised to make decisions on the remuneration policy, as well as on the amount of remuneration for the members of the board of directors – ie, the CEO, members of the supervisory board and the management board.

If the remuneration policy is not adopted at the general meeting of the shareholders, a revised proposal is submitted at the next meeting, where the company can continue to pay renumeration:

• in accordance with the previously approved renumeration policy; or
• in accordance with existing practice, if there is not renumeration policy adopted in the previous period.

The LBO provides that the members of the board of directors and management board may exercise the right to remuneration for work through a share in the company's profit as well.

As to the CEO, the LBO and applicable by-laws prescribes the obligation for the company to conclude the employment agreement with the CEO and, in that respect, the CEO is remunerated through the monthly salary.

There are no specific restrictions on remuneration on fees or benefits payable to directors and officers.

The LBO provides legal requirements for public joint stock companies in respect to the remunerations of the officers and in particular that it must be disclosed in the annual financial reports.

As a general rule of limited liability, shareholders of a joint stock company and members of a limited liability company shall not be liable for the obligations of the company.

However, shareholders of the joint stock company and members of a limited liability company shall be liable if they abuse the rule of limited liability, in which case their joint, solidary and unlimited liability for the company obligations may be determined by the competent court.

The LBO provides types of such abuse that exists when shareholders (ie, members):

• use the company to achieve a goal that is forbidden to them;
• use the company or its property to the detriment of the company's creditors;
• manage or dispose of the company's property contrary to the law; or
• reduce the company's assets in order to gain benefits for themselves or third parties, even though they knew or had to know that the company will not be able to settle its obligations.

In case of use of the company or its property to the detriment of the company's creditors, the creditor of the company is entitled to file a lawsuit to the competent court within six months of knowledge of the abuse (subjective deadline) and no later than three years from the date of the abuse.

The shareholders of the joint stock company and members of limited liability company constitute the general meeting. In that respect they have involvement in the management of a company by exercising their powers in the work of the general meeting, as explained in 3.2 Decisions Made by Particular Bodies.

Moreover, shareholders holding at least 5% of the share capital may hire an expert to examine the company's operations or accounting.

The general rule prescribed by LBO provides that the general meeting consists of shareholders in the joint stock company (ie, members in the limited liability company). However, the shareholder and member have the right to authorise another person to vote as their representative at the general meeting or to perform other legal actions.

Meetings of shareholders are provided by the LBO in the form of sessions. For the rules on holding and conducting such sessions, please see 3.3 Decision-Making Processes.

The shareholders are entitled to submit legal actions against the directors:

• to seek indemnification or transfer of benefit gained as a result of particular kinds of breach of legal duties or for exclusion of company member, depending on the type of violated legal duty;
• for compensation of the damage caused to shareholders by the violation of special duties towards the company that represents individual direct action, and the particularity consists in the fact that compensation belongs to the shareholder if the shareholder succeeds with the claim; and
• for compensation of the damage caused to shareholders by the violation of special duties towards the company that represents derivative action, and the particularity consists in the fact that the compensation belongs to the company if the shareholder succeeds with the claim.

The LCM regulates the obligation of shareholders in publicly traded companies on notification of the issuer of its voting rights when a shareholder:

• reaches, exceeds or falls below the threshold of 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75% as a result of the acquisition or disposal of the issuer's shares; or
• reaches, exceeds, or falls below the threshold referred to above, as a result of a change in the number of voting shares into which the issuer's share capital is divided, or changes in the number of voting rights from those shares.

According to the Montenegrin Law on Prevention of Money Laundering and Financing of Terrorism. publicly traded companies do not have to report their UBOs when they are listed on the regulated market that is subject to the disclosure requirements.

The general meeting of shareholders is competent for adoption of regular annual financial reports and statements. The audit of the company’s financial reports is performed upon the expiration of the accounting year and before the general meeting session is convened. Copies of the financial reports, including the auditor's reports, must be available for the shareholders' inspection at the company's registered office during regular business hours, at least 30 days prior to holding the general meeting of shareholders, and at the general meeting of shareholders as well.

The annual financial reports and consolidated reports of both joint stock company and limited liability company shall be submitted no later than 31 December of the business year, as well as on the day of the registration of status changes and on the day of issuing a decision on the voluntary liquidation of a legal entity.

The financial and management reports in written and electronic form shall be submitted to the competent tax authority no later than 31 March of the current year for the previous year, while the consolidated financial reports and consolidated management reports shall be submitted no later than 30 September of the current year for the previous year.

Furthermore, the joint stock company is obliged to submit financial reports to the Central Registry of Commercial Entities in Montenegro (CRPS) for the purpose of its registration.

The disclosure of the corporate governance arrangements exists in the form of a report on the operations of the company, the integral parts of which are the relations of the company with the parent company and companies in which its parent company has the status of parent or subsidiary.

The report on the operations shall list all legal transactions and transactions that the company had with its parent company and companies in which its parent company has the status of parent or subsidiary, with a statement of the board of directors or supervisory board including information if the company suffered damage from those transactions, as well as whether the company was compensated for any damage it may have received from such legal transactions.

The joint stock company is obliged to submit to CRPS, within seven days from the day of the change, documentation and data on the changes related to:

• the articles of association and the special act, or the founding act if the changes relate to the founding act;
• appointment, dismissal and other changes in data on members of the board of directors and CEO (ie, members of the supervisory board and management board);
• appointment, dismissal and information on the auditor, audit committee and secretary of the company, if any; and
• appointment, dismissal and other changes in the data on persons authorised to represent the company with the scope of authorisation to represent (individually or collectively).

In the event of initiating liquidation or bankruptcy proceedings the joint stock company is obliged to submit to CRPS:

• the decision on initiating of proceedings in case of liquidation or bankruptcy proceedings;
• the decision on the appointment of the liquidator (ie, the bankruptcy trustee), their identity, qualifications and authorisations, except those determined by the company's articles of association or the law; and
• the decision on the termination of the liquidation procedure (ie, the bankruptcy procedure), with the obligatory indication of all legal consequences of deleting the company from the register.

All the data mentioned above in relation to the joint stock company is publicly available and shall be published in the Official Gazette of Montenegro, stating the documentation on the basis of which the registration at the CRPS was performed.

A limited liability company is obliged to submit documentation and data on the changes in the company related to:

• articles of association;
• name and seat of the company;
• address for receiving official mail;
• email address;
• persons elected as members of the governing body and their appointments and dismissals;
• persons who, collectively or individually, have the authority to represent the company in relations with third parties and their appointments and dismissals;
• liquidation of the company;
• annulment of the establishment of the company by the competent court;
• appointment of liquidator; and
• shares and the amount of share capital, if the increase in share capital does not require a change in the statute.

All the data mentioned above in relation to the limited liability company is publicly available and shall be published on the website of the company, if it exists.

In case the documentation is not completed or the data from the application incomplete, CRPS will reject the incorporation of the company or implementing the change.

Furthermore, failing to make the filings is considered as misdemeanour.

The Montenegrin Audit Law (Official Gazette of Montenegro, No 1/2017) provides types of legal entities for which an audit is mandatory. Such legal entities, inter alia, are:

• entities of public interest (legal entities that issue securities and other financial instruments traded on the organised market, banks and other financial institutions and insurance companies); 
• medium-sized legal entities;
• parent legal entities, which together with dependent legal entities meet the conditions for classification in the group of medium-sized legal entities;
• parent legal entities, which together with dependent legal entities meet the conditions for classification in a group of large legal entities; and
• investment companies, fund and fund-management companies.

The audit of the company's financial report is performed after the end of the financial year, before the regular general meeting, in accordance with the law. The audit shall be audited by an independent auditor who meets the requirements established by the law. The auditor is appointed by the general meeting of shareholders, for a period determined by the articles of association, which cannot be longer than one year.

The auditor has the right to inspect all business books of the company at the time agreed and has the right to request from members of the board of directors (ie, members of the supervisory and management board), CEO and other employees of the company, explanations and information necessary to compile the audit report.

The auditor has the right to attend the assembly and provide explanations and answers to questions asked regarding the assessments and opinions given in the audit report. An excerpt from the audit report shall be read at the annual general meeting (AGM) and shall be available for inspection to all shareholders at that AGM.

Requirements prescribed by LBO in relation to directors in respect to management of risk and internal controls in the company are provided in 4.6 Legal Duties of Directors/Officers, 4.8 Consequences and Enforcement of Breach of Directors’ Duties and 4.9 Other Bases for Claims/Enforcement Against Directors/Officers.