(UN) EQUAL POSITION OF BUSINESS ENTITIES IN PRACTICE – THE CASE OF SERBIA

Abstract

Business entities in the Republic of Serbia are, by law, granted equal position, whether the business activity is conducted individually or collectively. Since the major reform of company legislation in 2004, there has been a significant increase in the number of newly established business entities, both entrepreneurs and companies. However, only a few years later, legislative changes placed entrepreneurs at a disadvantage compared to business companies. Moreover, small companies in practice face numerous challenges, due to which many of them cease operations and are removed from the business register. Although the conditions for establishing a business are relatively simple, access to sources of financing is quite limited. As a consequence, in many businesses, the personal assets of the owner of capital are confused with business assets. Besides that, bankruptcy and enforcement laws, in particular, fail to ensure equal treatment of business entities. As a final outcome, there is a high level of illiquidity among small businesses and an increased number of bankruptcies and liquidations. Therefore, it is necessary to consider legal instruments that would restore the balance between business entities established by the constitution and laws, but disrupted in practice. The aim of this paper is to highlight the need to restore equal treatment of all business entities in the Republic of Serbia — during establishment, operation, and voluntary or compulsory liquidation — through a fair and balanced legal framework. It will also propose possible legal solutions adapted to modern market trends and the harmonization of legislation with the EU acquis. The analysis employs normative, logical, comparative, and statistical methods.