Closing a Company in Montenegro: Liquidation, Deregistration, and What Goes Wrong
A business that has stopped trading is not a closed business. Until you remove the company from the Central Registry (CRPS), it remains a legal person — accruing tax, accounting, and reporting obligations every month it is not formally wound up. Montenegro’s new Companies Act (Zakon o privrednim društvima, OG 90/2025), in force from January 1, 2026, has tightened the consequences for letting a company “go quiet.”
Here is how the closing process works, what it costs, and where it gets stuck.
The four ways a company can end
| Procedure | Trigger | Who controls it |
|---|---|---|
| Voluntary liquidation | Owners decide to wind up a solvent company | Shareholders + appointed liquidator |
| Compulsory (judicial) liquidation | Court order — e.g. unmet capital requirements, annulled formation | Court |
| Forced liquidation (new in 2026) | Tax Administration flags non-compliance (e.g. no annual financials for two consecutive years) | CRPS, on state initiative |
| Bankruptcy | Company is insolvent and cannot pay its debts | Bankruptcy court + trustee |
Most small business owners only ever encounter voluntary liquidation. The rest matter because they show what happens if you skip it.
Voluntary liquidation, step by step
This is the standard route for a solvent company whose assets cover its debts.
1. Shareholders’ resolution and appointment of a liquidator
An extraordinary shareholders’ meeting passes a resolution to dissolve the company. For a DOO, the voting threshold is set in the articles of association; for an AD, a qualified majority (typically three-quarters) is required. The same meeting appoints a liquidator — often a director or a professional advisor — who takes over from management and runs the wind-up.
2. Registration of the decision
Within 5 days of the resolution, the liquidator files the decision with CRPS. Under the 2026 Companies Act, registered data is deemed known to third parties from the date of publication on the CRPS website (Article 5), in addition to the Official Gazette notice.
3. Notice to creditors
The liquidator must:
- Notify all known creditors in writing.
- Publish a public announcement in a daily newspaper at least twice, with 15 to 30 days between publications.
- Set a claims deadline of at least 60 days from the written notice or the second publication.
Late claims are not lost, but they are paid only after timely claims have been satisfied in full.
4. Settlement of liabilities
The liquidator collects receivables, sells remaining assets, and pays valid creditor claims in priority order. In abbreviated voluntary liquidation (available where there are no outstanding debts), the founders sign a notarised statement assuming unlimited joint liability for any undisclosed debts for three years after deletion from the register. That liability is the price of the speed.
5. Final accounts and deregistration
The liquidator prepares a final balance sheet and liquidation report. After the final shareholders’ meeting approves the report, the deregistration application is filed with CRPS within 7 days. Under Article 6(2) of the new Companies Act, the company ceases to exist on the date of deregistration.
Timeline at a glance
| Type of voluntary liquidation | Realistic duration |
|---|---|
| Abbreviated (no debts, founders accept residual liability) | 7–30 days |
| Standard (60-day creditor period + final accounts) | 3–6 months |
| Standard with contested claims | 6–18+ months |
Tax clearance: the gatekeeper
CRPS will not deregister a company without a tax clearance certificate (uvjerenje iz poreske uprave o izmirenim obavezama) confirming that profit tax, VAT, payroll taxes, and social contributions are all settled.
The Tax Administration treats this as a hard gate. In practice, this means:
- A final corporate income tax return is filed; the company must determine capital gain or loss as if all assets were sold at market value.
- A final VAT return is filed if the company was VAT-registered. VAT registration terminates with the deletion of the legal entity. For the underlying VAT mechanics, see our VAT filing guide.
- Any pending audits or unfiled returns must be cleaned up first. A company with two missing annual filings cannot voluntarily liquidate — it can only wait for forced liquidation, or pre-emptively use bankruptcy.
This is the single most common reason voluntary liquidations stall. A clean exit requires clean books going in.
Employees: notice, severance, and the redundancy rules
If the company has staff, the Labour Law (Zakon o radu) governs how they leave. Notice periods follow a graduated scale:
| Length of service | Minimum notice |
|---|---|
| Probation | 5 days |
| Up to 1 year | ~15 days |
| 1–5 years | ~30 days |
| 5+ years | ~45 days |
Under Article 94 of the Labour Law, severance (otpremnina) is owed to every redundant employee, regardless of length of service. The formula is at least one-third of the employee’s average monthly net salary for each year of service, with a floor of three average monthly net salaries — comparing the employee’s own average against the national average and using whichever is more favourable to the employee.
In addition:
- All outstanding wages, contributions, and benefits must be paid before deregistration.
- The Employment Bureau (Zavod za zapošljavanje) must be notified in redundancy situations.
- The Pension and Disability Insurance Fund (PIO) and Health Insurance Fund records must be closed.
For the underlying payroll mechanics (gross-to-net, contribution rates, and deadlines), see our payroll guide. The order of operations in liquidation matters: severance and contributions are creditor claims that must be settled before any distribution to owners.
Forced liquidation under the 2026 Companies Act
This is new and important. Failure to file financial statements for two consecutive years now triggers forced liquidation initiated by CRPS, with a notice period followed by deletion of the company from the register.
What forced liquidation does not do:
- It does not formally settle creditor claims through a structured process.
- It does not absolve owners of underlying tax debts.
- It leaves creditors to pursue shareholders directly, rather than going through a liquidator.
It is a clean-up tool for the state, not a soft exit for the owner. Anyone treating it as “just stop filing and the company will go away” misreads the regime.
What about pausing instead of closing?
Montenegro has no formal “dormant status” for a DOO or AD. Stopping operations does not exempt a company from filing annual accounts, paying minimum taxes, or maintaining a registered seat.
The one exception is for sole proprietors (preduzetnik), who can register a formal suspension — pausing operations while keeping their business name and bank account, with no tax or social contributions due during the suspension period (unless the proprietor voluntarily maintains minimum health insurance contributions). For incorporated companies, the only real choice is to close properly or risk forced liquidation. To compare incorporation forms more broadly, see DOO vs. Preduzetnik.
Common mistakes that block a clean exit
Treating “we stopped trading” as closure. The company is still alive on paper and still accruing obligations. Annual financials, profit tax returns, and social filings continue until deregistration is complete.
Leaving the tax file untidy. Voluntary liquidation requires a tax clearance certificate, which requires up-to-date filings, paid VAT and payroll, and any open audits closed. Companies with two missing annual returns cannot get the certificate — and therefore cannot voluntarily liquidate.
Underestimating employee obligations. The three-month-salary severance floor surprises many owners. So does the fact that severance is owed regardless of length of service. Failing to settle severance before deregistration creates labour-inspection exposure that survives the company.
Ignoring contracts and leases. A liquidator who fails to terminate or transfer a lease may have to fund it for the remaining term, or face penalty claims against shareholders who personally guaranteed it.
Trying to liquidate an insolvent company. If liabilities exceed assets, voluntary liquidation is not the right tool — bankruptcy is. Pushing through a “liquidation” while insolvent exposes shareholders to personal liability.
How AQ helps
Closing a company correctly is a logistics problem layered on top of a legal one: every filing, every certificate, and every notice has its own counterparty, format, and deadline. We act as your liquidator or your liquidator’s representative, run the CRPS and Službeni list publications, prepare the final tax and VAT returns, secure the tax clearance certificate, manage employee terminations and severance under the Labour Law, and walk the deregistration application through to the final entry in the register. Get in touch if you are thinking about closing — we will tell you, before you start, whether voluntary liquidation is realistically open to you or whether the file needs cleaning up first.
Figures, procedural steps, and statutory references in this article reflect Montenegrin law in force as of 2026, including the new Companies Act (Sl. list CG 90/2025), the Labour Law (Article 94), the Corporate Income Tax Law, and the VAT Law. This article is for information only. Consult a licensed Montenegrin advisor or attorney before acting on it.