RS Government sets law proposals for establishing e-registration of business entities

The Government of the Republic of Srpska, at the 29th session held on July 18, 2019, has determined the Law Proposal amending the Law on Companies, Law Proposal on Amendments to the Law on Crafts and Entrepreneurial Activities, Law Proposal on Amendments to the Law on Registration of Business Entities in the Republic of Srpska regarding the establishment of e-registration for companies and entrepreneurs electronically.

The reasons to adopt these laws are stemming from the need for continuing the company registration reform and providing an opportunity to submit applications for registering company incorporation and amendments electronically.

By completing this part of the reform, individuals who intend to operate in the Republic of Srpska will be able to register businesses in the form of a business company and the form of an entrepreneur electronically, with minimal financial costs, promptly and in a simple and easy way.

The differences between the Draft and the Law Proposal on Amending the Companies Law are reflected in the fact that a more precise provision is made regulating the fact that there will be no need for notarial certification of the incorporator’s signature for single-member limited liability companies, but only for those who pay the prescribed minimum pecuniary part of the share capital.

The main reason for the adoption of the Law Proposal on Amendments to the Law on Crafts and Entrepreneurial Activities is regulating the conditions and manner of implementation of the entrepreneurial electronic registration procedure. In addition to establishing operational possibilities for submission of applications for registration of entrepreneurs electronically, this law also changes the concept regarding the submission of documents, which confirm the registration requirements for the entrepreneurial business form incorporation.

At variance with the current solution according to which the parties submit identity documents, the tax bill and the protective measure of business activity prohibition, according to the new concept, when a party submits the registration application, regardless of whether it is a written or electronic application, there is no obligation to submit the mentioned documents. All data previously confirmed with the above documents for entrepreneurial form by the registration authorities, in the future shall be verified via electronic data record maintained by the Ministry of Interior and the Tax Administration of the Republic of Srpska.

Therefore, by introducing the new concept for verification of the requirements for doing business as an entrepreneur, the parties are entirely exempt from submission of documents confirming that the requirements for business registration as an entrepreneur are met. In this way, the cost and time of applying for entrepreneurial registration is reduced, which contributes to the simplicity and cost-effectiveness of the entrepreneurial registration process.

It is important to emphasize that due to this new concept of entrepreneurial business requirements verification, the Republic of Srpska will be the only country in the region where, in the entrepreneurial registration process, as a rule, the parties shall not provide proof of fulfillment of the registration conditions, nor issue certain statements about the data pertinent to this procedure.

In reference to the Law Proposal on Amendments to the Law on Registration of Business Entities in the Republic of Srpska, the differences in this Proposal against the adopted Draft Law lie in a more detailed procedure of electronic registration regarding the e-application receipt confirmation, submission of documents attached to the e-application, the data checked by the courts of registration through the Register of the competent authorities, deliverance of incorporation decision per e-application, lodging an appeal against the decision, and a mandatory court fee to be paid in the process of reserving a business name, subsequently to be regulated by the Law on Court Fees.

This Law Proposal stipulates that the electronic registration will be possible only for domestic legal and natural persons, because qualified electronic certificate will not be issued for foreign natural persons and legal entities, which however will be enabled in the next phase of the reform of the registration of business entities in the Republic of Srpska.