Montenegro has enacted a new Companies Act that substantially reshapes the domestic corporate law landscape. Although the Act formally entered into force in August 2025, its provisions will begin to apply on 1 January 2026.

The new Act represents a departure from the regulatory approach taken in recent years. It responds to practical difficulties encountered under the previous framework and introduces a more differentiated and proportionate system of rules, particularly by clearly separating the legal regimes applicable to joint-stock companies and limited liability companies. As a result, limited liability companies regain greater operational flexibility, while joint-stock companies are subject to more structured governance and disclosure requirements.

Mandatory alignment and transitional timeframes

All companies and entrepreneurs registered with the Central Registry of Business Entities before the beginning of the Act’s application must harmonize their internal organization and business activities with the new legal framework. This process must be completed within three months from 1 January 2026, meaning that the registration of amended constitutional documents and other required changes must be finalized by 31 March 2026.

The Act also prescribes additional transitional deadlines for certain obligations. Public joint-stock companies are required to meet newly introduced gender balance rules in their management bodies by 30 June 2026. Furthermore, joint-stock companies that have issued ordinary shares with unequal nominal values must standardise those values within one year, by the end of 2026, while preserving existing ownership ratios.

Ongoing procedures initiated prior to the start of the Act’s application, including restructurings, capital changes and share issuances, will continue to be governed by the regulations that were in force at the time they commenced, ensuring continuity and legal certainty.

Governance standards and management structure

The Act introduces a more detailed and coherent regulation of corporate governance. It elaborates on one-tier and two-tier management models, clarifies the role and composition of governing bodies, and provides a clearer legal basis for the establishment and operation of committees. At the same time, the required content of articles of association has been revised, making amendments unavoidable for a large number of existing companies.

A notable development concerns public joint-stock companies that qualify as large entities under accounting regulations. These companies must ensure a minimum level of representation of the underrepresented gender in their boards. Compliance with this requirement is directly linked to registration: if the prescribed balance is not met, the CRBE will refuse to register board members. Companies are also required to adopt internal strategies on gender balance, report annually to the competent authority, and publicly disclose relevant data as part of their corporate governance reporting.

In addition, joint-stock companies are now subject to stricter transparency requirements regarding executive compensation, including the adoption of a remuneration policy and the preparation of an annual remuneration report subject to audit and public disclosure.

Digitalization and shareholder engagement

A major innovation of the new Act is the introduction of full electronic incorporation. Founding documents may be executed and filed electronically, in accordance with regulations governing electronic identification and signatures. This significantly simplifies and accelerates the incorporation process, although competent authorities retain the right to require personal attendance in specific cases where additional verification is necessary.

The Act also establishes a framework for identifying shareholders and communicating with them through electronic means. It expressly regulates remote participation and voting at general meetings and introduces more precise rules on convening meetings, thereby supporting greater shareholder engagement and procedural clarity.

Companies are subject to expanded disclosure and record-keeping duties vis-à-vis the CRBE, including a strict obligation to register relevant changes within a short statutory deadline, reinforcing the legal effect of registration towards third parties.

Capital rules, shares, and minority safeguards

The new legislation tightens the rules governing share capital and ownership structures. Multiple-voting shares are no longer permitted, and the regime governing the acquisition and disposal of a company’s own shares has been revised. Companies with shares of differing nominal values are required to harmonize those values, enhancing transparency and simplifying ownership structures.

The regulation of non-cash contributions has been strengthened by introducing an obligation to reassess their value if circumstances change before the contribution is actually made. Minority shareholders holding a defined minimum stake benefit from enhanced protection mechanisms, including access to independent, court-appointed valuations in specified situations.

For limited liability companies, the Act introduces the possibility of additional shareholder payments that do not affect registered share capital, together with detailed rules governing their introduction, exemption, and repayment.

Business identity, corporate groups, and structural changes

The Act clarifies the legal concept of a company’s business name, distinguishing it from the distinctive designation under which the company operates. It prescribes rules on language, display, and use in legal transactions, strengthening transparency in commercial dealings.

A dedicated framework is introduced for groups of companies, defining parent–subsidiary relationships and both legal and factual control. Control is presumed in certain circumstances, including cases where a single entity appoints the majority of members of management or supervisory bodies.

The rules governing liquidation have been reorganized and clarified, distinguishing between voluntary, court-ordered, and compulsory liquidation, and addressing their interaction with insolvency proceedings. The Act also introduces more detailed requirements for transactions involving assets of significant value.

EU-oriented reforms and postponed application

Certain mechanisms envisaged by the Act will become applicable only upon Montenegro’s accession to the European Union. These include cross-border reorganizations and the establishment of European corporate forms such as the European Company (SE) and the European Economic Interest Grouping (EEIG). Their inclusion nevertheless reflects a clear strategic orientation towards full integration into the EU corporate law system.

Practical implications for businesses

Companies operating in Montenegro should use the transitional period to conduct a comprehensive review of their corporate documentation and governance arrangements. Particular attention should be paid to amendments of articles of association, preparation for digital communication with shareholders, implementation of remuneration and reporting frameworks, and timely compliance with gender balance requirements where applicable.

Taken as a whole, the new Companies Act establishes a more modern, structured, and predictable corporate law environment. By combining stronger governance standards with digital solutions and EU-oriented reforms, it provides a solid legal foundation for future business growth and market competitiveness in Montenegro.