What is a LLC – Limited liability company?

A Limited Liability Company (LLC) is one of the most common and practical forms of business organization in Montenegro. The main advantage of an LLC is the limited liability of its owners, which means that founders are responsible for the company’s obligations only up to the amount of their initial contribution.

Below is an overview of the key aspects of establishing and operating an LLC.

NUMBER OF OWNERS AND INITIAL CAPITAL

• An LLC can have one or more owners, but no more than 30.
• The minimum initial capital is 1 euro, but owners can contribute a larger amount.
• The contribution can be paid at the time of company formation or increased later during business operations.
• All contributions must be registered with the Central Registry of Business Entities (CRPS).

EXECUTIVE DIRECTOR

• An LLC must appoint an executive director.
• The executive director is legally responsible for company operations and represents the company in accordance with the Articles of Association.
• Social contributions on their salary are calculated in the same way as for any other employee, based on the agreed salary.

LIMITED LIABILITY OF OWNERS

• Owners are liable only up to the amount of their registered contributions.
• If the company has debts, creditors can collect only from the company’s assets, not from the personal assets of the owners.

ACTIVITIES OF AN LLC

• An LLC may carry out both primary and secondary business activities, which are defined in the Articles of Association.
• Only the primary activity is listed in the Registration Decision, while secondary activities are shown exclusively in the Articles.

PROFIT AND TAXES

• An LLC generates profit and pays corporate income tax.
• The tax return must be filed annually. The deadline for 2024 is March 31, 2025.

PROFIT DISTRIBUTION AND DIVIDEND TAX

The company’s profit belongs to the company, not directly to the owners. To use it for private purposes, the owner must:

1. Pay dividend tax (15%) on the gross profit amount.
2. Pay a local surtax on dividend tax (10–15%), depending on the municipality.

The total tax burden amounts to 18–20% on the net profit.

For example, if you want to withdraw 1,000€ of profit, you will need to pay between €180 and €200 in taxes and surtaxes, depending on the municipality.

WHY CHOOSE AN LLC?

An LLC is flexible, secure, and suitable for small and medium-sized businesses, but it requires accurate bookkeeping and regular fulfillment of tax obligations.

Perfectum Agency provides full support in:

• preparing and submitting documentation for company formation,
• registration with the CRPS,
• accounting and tax services,
• financial and legal consulting.

If you are considering starting an LLC or want to improve your existing business, contact us — with our help, you can be sure your operations remain legally compliant and stress-free.