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Glossary

The terms in your documents, one by one.

Short definitions, with the Montenegrin name you will see in documents and a link to the page where the term is used.

We reply on the next working day. We name the fee in writing, in our reply to your inquiry. Scope and timing are confirmed in writing before work starts.

Schule d.o.o. Podgorica Checked

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Terms

Apostille and certified translation

A foreign company owner's register extract and decision usually need an apostille or legalization and a certified translation into Montenegrin. Their fees are listed separately in the proposal.

Where it is used : Apostille and certified translation
Arm's length

Related-party transactions are reviewed against the arm's length principle in due diligence; transfer pricing is covered by transferne-cijene.me.

Where it is used : Arm's length
Articles of associationstatut

The company's internal rules, prepared together with the founding act.

Where it is used : Articles of association
Compliance review

The bank's own review of a company's file before it opens an account. Whether and when the account is opened is the bank's decision.

Where it is used : Compliance review
CRPSCentralni registar privrednih subjekata

Central Registry of Business Entities. Registration follows once the founding documents are signed and complete.

Where it is used : CRPS
Data room

The documents of the target made available for due diligence. Access is set up in the scoping phase.

Where it is used : Data room
DOOdruštvo sa ograničenom odgovornošću

Limited liability company. Typical use: SMEs, subsidiaries and single-owner companies. Any person or company with legal capacity, domestic or foreign, can found one (Law on Companies, Art. 7).

Where it is used : DOO
Encumbrance

A charge registered on a property. Real estate title search and encumbrance check are part of legal due diligence.

Where it is used : Encumbrance
Executive directorizvršni direktor

The person appointed to run the company. Provides a passport copy, a signed statement accepting the appointment and a certificate of not being banned from a management function (for a DOO: Registration Rulebook, Art. 18).

Where it is used : Executive director
Founding act

The act by which the owners found the company. A written act carries the founders' certified signatures; an electronic act carries qualified electronic signatures (Law on Companies, Art. 8).

Where it is used : Founding act
Net debt bridge

Part of financial due diligence, together with the working capital assessment.

Where it is used : Net debt bridge
PIBporeski identifikacioni broj

Tax number of the company, obtained with the CRPS registration.

Where it is used : PIB
Power of attorneypunomoćje

Lets a proxy file the registration on your behalf (Registration Rulebook, Art. 4).

Where it is used : Power of attorney
Qualified electronic signaturekvalifikovani elektronski potpis

Signature used on an electronic founding act instead of certified signatures on paper (Law on Companies, Art. 8). An electronic act is not possible where real estate is contributed as capital (Art. 8(5)).

Where it is used : Qualified electronic signature
Quality of earnings

Normalizing EBITDA for non-recurring items, as part of financial due diligence.

Where it is used : Quality of earnings
SPA

Share purchase agreement. The final due diligence phase supports warranties, indemnities and price adjustments in the SPA.

Where it is used : SPA
Ultimate beneficial owner

The person who ultimately owns or controls the company. Banks ask for information on the owners and the ultimate beneficial owners as part of the bank file.

Where it is used : Ultimate beneficial owner
VAT registrationregistracija za PDV

Registration with the Tax Administration where the activity or turnover requires it.

Where it is used : VAT registration
Withholding tax

Tax on cross-border payments such as dividends, royalties and services, reviewed in tax due diligence.

Where it is used : Withholding tax

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