THE ROLE OF THE NEW FINANCIAL INSTRUMENT IN REDEFINING OWNERSHIP OF A LIMITED LIABILITY COMPANY
DOI:
https://doi.org/10.25234/pv/33445Abstract
In the legal system of the Republic of Serbia, a sui generis method of acquiring shares in a limited liability company has been accepted in the past several years as a successful corporate governance measure, known as the Employee Stock Ownership Plan (ESOP). This measure enables employees to become co-owners of the company in which they work. In comparative law solutions, this measure is typically reserved for employees. The Serbian legislator does not restrict the categories of persons who are entitled to use the ESOP model. The main difference from other comparative law solutions lies in the definition of two new legal institutes in the Companies Act: the financial instrument – the right to acquire shares, and the right to reserved own share. This paper analyzes this new financial instrument as a means for acquiring shares in a company. The author first examines the specific characteristics of this financial instrument and its similarities with other financial instruments in Serbian law, with specific reference to the ESOP model in comparative law. Then, the author analyzes the process of issuing and registering this financial instrument in the Central Securities Depository and Clearing House, as well as specific cases of its maturity. Next, the author focuses on the procedure for acquiring shares in the company, and the right to judicial protection for holders of this financial instrument and their heirs as a means of exercising the rights arising from it.
References
Adams J.S, Baksa B, Coleman D.D, Janich D, Jones B, Rodrick S, Rosen C, Staubus M and Walter D, ‘Equity alternatives, Phantom Stock, SARs, Restricted Stock, Performance Awards, and More’, 21st Edition, (The National Center for Employee Ownership 2024)
Alguacil P, ‘Tax treatment of co-operatives in Europe under the State aid rules’ in Brazda J, Dellinger, M, Rößl, D (eds), Genossenschaften im Fokus einer neuen Wirtschaftspolitik, (Teilband IV: LIT-VERLAG GmbH & Co KG 2012) 1091–1104
Birchall J and Ketilson L.H, ‘Resilience of the cooperative business model in times of crisis,’ (International Labour Organisation 2009)
Blasi J, Kruse D and Freeman R.B, ‘Broad-based employee stock ownership and profit sharing: History, evidence, and policy implications’, (2018) 1(1) Journal of Participation and Employee Ownership 3
Collin P, ‘Actualité du régime fiscal des management packages, des BSPCE et attributions gratuites d’actions’, (2016) 499 Revue Française de Comptabilité 32
Ellerman D and Gonza T, ‘A Critical Analysis of Different Forms of Employee Ownership: A Preprint forthcoming in the International Review of Applied Economics’, (2024) International Review of Applied Economics 1
Ellerman D, Gonza T and Berkopec G, ‘European Employee Stock Ownership Plan (ESOP): the main structural features and pilot implementation in Slovenia’, (2022) 2(12) SN Business & Economics, Springer, 1
Galetić L and Rašić Krnjaković S, ‘Dioničarstvo zaposlenih u Hrvatskoj – stanje, mogućnosti i perspektive’, (2004) 55(9‒10) Ekonomski pregled 752
Goić S, ‘Employees' attitudes towards employee ownership and financial participation in Croatia: Experiences and cases’, (1999) 21 Journal of Business Ethics 145
Handayani F and Yurniwati Y, ‘Analysis of the influence of employee stock ownership program (ESOP) application of company financial performance’, (2020) 20(2) Jurnal Ilmiah Universitas Batanghari Jambi 616
Hruška D, Marković M and Podrug N, ‘Privatization in Croatia – transition into the free market competition – Case study of RVR’, (2007) 10(2) International Journal of Management Cases 68
Ismiyanti F and Mahadwartha P A, ‘Does employee stock ownership plan matter? An empirical note’, 2017 14(3) Investment management and financial innovations 381
Ivanov S I and Zaima J K, ‘Analysis of the effects of ESOP adoption on the company cost of capital’, (2011) 37(2) Managerial Finance 173
Jovanović N, Radović V i Radović M, ‘Kompanijsko pravo: pravo privrednih subjekata’, 3. izdanje, (Pravni fakultet Univerziteta u Beogradu, 2023)
Jovanović Zattila M, ‘Pravo zaposlenog na sticanje udela u društvu sa ograničenom odgovornošću’, 2023 100(62) Zbornik radova Pravnog fakulteta u Nišu 57
Kaštelan Mrak M, Sokolić D and Vretenar N, ‘ESOPs In Croatia – Some Recent Developments and Issues’, (6th International Conference "Economic Integration, Competition and Cooperation", Lovran, Hrvatska 2007) 477–487
Lowitzsch J, Menke D. J, Suarsana D, Nuttall G, Gonza T and Mirabel T, ‘Launching a European Employee Stock Ownership Plan (European ESOP)’, (2024) 7(2) Journal of Participation and Employee Ownership 168
Lowitzsch J and Hashi I, ‘The promotion of employee ownership and participation’, (Inter-University Centre for European Commission’s DG MARKT, 2014)
Marinković M, ‘Participacija zaposlenih u vlasništvu kompanije: Vodič za ESOP strukture u Republici Srbiji. Finansijski instrument – pravo na sticanje udela’, (ICT HUB-a i Inicijative Digitalna Srbija, 2023)
Martínez, G. T, ‘En busca de una alternativa al trust para articular planes de participación financiera: Employee Stock Ownership Plans (ESOPS)’, (2014) 6(2) Cuadernos Derecho Transnacional 255
Momčilov M i Knežević Bojović A, ‘Rezervisani sopstveni udeo i finansijski instrument – pravo na sticanje udela: mehanizmi za realizaciju ESOP-a u Republici Srbiji’, (2024) 119 Arhiv za pravne i društvene nauke 103
Mygind N, ‘Three Models of Employee Ownership: Worker Cooperative, EOT and ESOP – Overcoming Barriers – Important Choices: Pros and Cons’, (2023) 6(3) Journal of Participation and Employee Ownership 264
Pendleton A, McDonald J, Robinson A and Wilson N, ‘Patterns of employee participation and industrial democracy in UK ESOPs’, (London School of Economics and Political Science, Centre for Economic Performance, 1995)
Radović V, ‘Pružanje finansijske podrške za sticanje svojih akcija’, (2007) 12 Pravni život 183
Rodrick S, ‘An Introduction to ESOPs’, (The National Center for Employee Ownership, 2023)
Rosen C and Quarrey M, ‘How well is employee ownership working?’, 1987 65(5) Harvard Business Review 126
Seralurin Y.C, Larasati R and Pattiasina V, ‘Institutional Ownership as Moderation of Execution Price Relationship and Employee Stock Ownership Program (ESOP): A Company Performance Evaluation’, (2020) 2(2) The International Journal of Social Sciences World 85
Stas L, ‘What are the most significant effects of the Employee Stock Option Plan (ESOP) on the Belgian entrepreneurial landscape?’, (Louvain School of Management, Université catholique de Louvain, 2022)
Sunarsih N.M and Dewi N.P.S, ‘Pengaruh Penerapan Employee Stock Option Plan (ESOP) pada Kinerja Keuangan dan Nilai Perusahaan di Bursa Efek Indonesia’, (2018) 13(2) Jurnal Ekonomi Dan Pariwisata 111
Tipurić D, Goić S and Lovrinčević M, ‘The effects of ESOP implementation on attitudes towards work and on ownership culture development – case study of AD Plastic Solin’, (2007) 10(2) International Journal of Management Cases 6
Tran P.H.H, Tran T.H and Aubert N, ‘Esops, Efficiency, and Transparency: A European Banking Perspective’, Elsevier, (2023), 1
Verdenia D.L, Ahmedov N and Kamil A.A, ‘Efficiency Comparison between the Employee Stock Option Plan (ESOP) and Non ESOP Companies’, (2023) 21 Review of Economics and Finance 1871
Vasiljević M, ‘Komentar Zakona o privrednim društvima: sa odabranom sudskom praksom i registrom pojmova: prema stanju zakonodavstva od 31. avgusta 2023. godine’, (Službeni glasnik, 2023)
Zhang Y, ‘Employee Stock Ownership Plans and Corporate Innovation’, 2023 2(1) Academic Journal of Management and Social Sciences 54
Zhou Q, Han H and Han J, ‘Does employee stock ownership plan have monitoring and incentive effects?--An analysis based on the perspective of corporate risk taking’, (2024) 10(2) Heliyon 1
REGULATIONS AND DOCUMENTS
European Parliament Resolution of 14 January 2014 on social protection for all, including self-employed workers (2013/2111(INI))
Zakon o obligacionim odnosima (Civil Obligation Act), Službeni glasnik SFRJ, broj 29/1978, 39/1985, 45/1989 – odluka USJ i 57/1989, Službeni glasnik SRJ, broj 31/1993, Službeni list SCG 1/2003 – Ustavna povelja, i Službeni glasnik RS, broj 18/2020
Zakon o porezu na dohodak (Income Tax Act), Narodne novine RH, broj 115/2016, 106/2018, 121/2019, 32/2020, 138/2020, 151/2022, 114/2023, effective as of 1 January 2024
Zakon o porezu na dohodak (Income Tax Act RS), Službeni glasnik RS, broj 24/2001, 80/2002, 80/2002 – dr. zakon, 135/2004, 62/2006, ..., 94/2024, 101/2024 – usklađen din. iznos, i 8/2025 – usklađen din. iznos
Zakon o postupku registracije u agenciji za privredne registre (The Act on the Registration Procedures in the Agency for Business Registers), Službeni glasnik RS, broj 99/2011, 83/2014, 31/2019 i 105/2021
Zakon o privrednim društvima (Companies Act RS), Službeni glasnik RS, broj 36/2011, 99/2011, 83/2014 – dr. zakon, 5/2015, 44/2018, 95/2018, 91/2019 i 109/2021
Zakon o trgovačkim društvima (the Companies Act RC), Narodne novine RH, broj 111/1993, 34/1999, 121/1999, 52/2000, 118/2003, 107/2007, 146/2008, 137/2009, 125/2011, 152/2011, 111/2012, 68/2013, 110/2015, 40/2019, 34/2022, 114/2022, 18/2023, 130/2023
INTERNET SOURCES
Predlog zakona o izmenama i dopunama Zakona o trgovačkim društvima (The Proposed Act on amendments and supplements to the Companies Act), 9. oktobar 2019., <http://www.parlament.gov.rs/upload/archive/files/cir/pdf/predlozi_zakona/2019/2816-19.pdf> accessed 3 October 2024
Centralni registar depo i kliring hartija od vrednosti (2024). Aktivni FI registrovani u CR HoV – Pravo na sticanje udela(PSU)/Active Financial Instruments registered in the Central Securities Registry: Right to Acquire Shares (RAS), <http://www.crhov.rs/?Opcija=5&TipHartije=prava> accessed 3 October 2024
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Milena Jovanović Zattila
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Authors retain the copyright on the papers published in the Journal, but grant the right of first publication to the Journal. Papers accepted for publication or already published in Pravni vjesnik of the Faculty of Law in Osijek may be published by the author(s) in other publications only with proper notice of its previous publication in Pravni vjesnik.
