Selling Your Company in Montenegro
As an entrepreneur, you may choose to sell your business for various reasons: retirement, co-founder conflicts, or moving to another country. In any event, selling your limited liability company (or other company type) in Montenegro can be a complex and challenging process that requires careful planning. It is highly recommended to engage an accountant and/or a law firm as you proceed.
Before listing your business for sale, take the time to accurately value all business assets, including real estate, investment properties, and intellectual property. To determine the estimated worth of your company, you may either use the income method, which analyzes current and projected cash flows, or the market method, which compares the sale prices of similar businesses that have recently sold.
Draft a Purchase of Business Agreement
Before the sale can be completed, you must draft and notarize a sales contract between you and the new owners to transfer the shares to the buyer. The sales agreement outlines all terms and conditions of the transaction, including a complete inventory, if applicable. To start, here are some key considerations:
- Provide detailed information about the buyer, the seller, and the business, including its main business activity.
- Specify the number of shares and their price (most transactions in Montenegro involve the sale of shares rather than assets).
- Determine whether a deposit is required.
- Outline the closing date and payment terms.
- Specify whether warranty clauses should be included.
The Transfer of Ownership
Upon signing and notarizing the Purchase of Business Agreement, the statutory records need to be updated with Montenegro’s Company Register (CRPS) to reflect the transfer of ownership. You must notify the CRPS within one month that the business has new owners (shareholders) by submitting a revised version of the Articles of Association, including an overview of the new shareholders and the appointed company director.
The change is usually registered within 7–10 days, and the new owners receive a Certificate of Amendment, which provides detailed information about each new shareholder. This document must be sent to all banking partners (if the company maintains its bank accounts) and other stakeholders, and is also required if the director or employees need to apply for residency in Montenegro.
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