Ministry of Economic Development intensifies efforts in drafting commercial law legislation

In pursuit of further aligning Montenegro's legislative framework in the field of commercial law with the EU acquis, the Ministry of Economic Development has intensified activities over the past four months in drafting a new Law on Business Entities, following a period of stagnation.

The key rationale for enacting new legislative solutions primarily stems from the implementation of the existing law, which has demonstrated the need for further enhancements of provisions that have proven problematic in practice.

Additionally, the law has been improved regarding alignment with certain parts of EU Directive 2017/828 as regards the encouragement of long-term shareholder engagement, EU Directive 2019/1151 as regards the use of digital tools and processes in company law, EU Directive 2019/2121 as regards cross-border conversions, mergers and divisions, as well as EU Directive 2022/2381 on improving the gender balance among directors of listed companies and related measures.

It is expected that the enactment of the new law will contribute to complete harmonization of the national legislative framework with existing EU regulations, thereby creating conditions for a more integrated approach to the national market and its easier connection with the EU market environment.

Concurrently with this process, due to the clear interconnection regarding the improvement of the position of the Central Registry of Business Entities and the process of registering business entities, activities have been undertaken to prepare the Draft Law on the Registration of Business and Other Entities. One of the key reasons for enacting this law is the under-regulation in the field of registering business and other entities, which leads to many ambiguities in procedures, inconsistent and divergent practices, as well as conflicting interpretations.

It is concluded that the proposed laws will result in positive effects, enabling the improvement of business conditions, further stimulation of economic activity and competitiveness, a more favorable business environment, thereby further encouraging the establishment of new business entities in the market and market competition.

In consideration of the draft new Law on Business Entities, the Ministry of Economic Development will commence a Public Consultation on 3 April 2024, lasting for 20 days, during which a roundtable will also be held.