Bankruptcy proceedings for a business entity
Who can file for bankruptcy, the role of the bankruptcy administrator, and how proceedings run before the commercial court.
Course of proceedings
Bankruptcy is a judicial procedure that arises once a business entity becomes unable to pay (insolvent) - unlike liquidation, which members voluntarily initiate while the company can still settle all of its obligations. The procedure is governed by the Bankruptcy Law and conducted before the commercial court, not administratively before the Business Registers Agency.
The petition to open bankruptcy proceedings can be filed by a creditor, the debtor, or the liquidation administrator. A creditor does so once they have made plausible both their own claim and one of the bankruptcy grounds on the debtor's side - most often a lasting inability to pay (the debtor fails to settle due obligations over an extended period, or suspends all payments), less often an imminent inability to pay or over-indebtedness (liabilities exceed assets). The debtor files when one of the bankruptcy grounds exists, and the Bankruptcy Law sets it no deadline in days. The liquidation administrator, unlike a creditor, must file within 15 days of drawing up the opening liquidation balance sheet or report that shows over-indebtedness (Art. 539 of the Companies Act).
Once the petition is received, preliminary bankruptcy proceedings follow, in which the court checks whether a bankruptcy ground genuinely exists, appoints a temporary bankruptcy administrator if needed, and may restrict the debtor's disposal of its assets to preserve them. At this stage, the petitioner pays an advance toward the costs of the proceedings, the amount of which is prescribed according to the debtor's size. If the court establishes that a bankruptcy ground exists, it issues a decision opening bankruptcy proceedings, appoints a bankruptcy administrator, and publishes a notice - from that point, the deadlines for creditors to file their claims start running.
The bankruptcy administrator takes over managing the debtor's assets and business, draws up an inventory of the assets and a report on the debtor's economic and financial position, and examines the claims filed by creditors. At the first creditors' assembly (or earlier, through a pre-packaged reorganization plan the debtor files together with the petition itself), it is decided whether the proceedings continue as bankruptcy liquidation - selling the entirety of the assets and settling creditors from the proceeds, after which the debtor ceases to exist - or as reorganization, in which the debtor continues operating under a plan that changes the terms and pace of settling its obligations to creditors. The proceedings are closed once the liquidation and distribution of assets is complete, or once the reorganization plan has been carried out.
Jurisdiction
Bankruptcy proceedings are conducted by the commercial court with jurisdiction over the debtor's registered seat. The proceedings are led by the bankruptcy judge, who makes the key decisions (opening the proceedings, appointing and removing the bankruptcy administrator, deciding disputed questions), while the bankruptcy administrator manages the debtor's assets and business day to day, under the court's supervision. The creditors' assembly and the creditors' committee (if formed) take part in deciding on the course of the proceedings, above all the choice between bankruptcy liquidation and reorganization.
Outside the bankruptcy proceedings themselves, professional oversight of bankruptcy administrators is carried out by the Agency for Licensing Bankruptcy Administrators (ALSU), which issues and withdraws licenses and keeps the register of bankruptcy administrators. The Business Registers Agency (APR) keeps records of bankruptcy proceedings opened and concluded and carries out the bankruptcy debtor's removal from the register once bankruptcy liquidation is concluded. Disputes over contested claims that are not resolved within the bankruptcy proceedings themselves are, as a rule, resolved in separate civil litigation before the same or another competent court, depending on the value and nature of the dispute.
Sources
- Bankruptcy Law (Zakon o stečaju, Official Gazette RS Nos. 104/2009 ... 95/2018 and 44/2025 - Constitutional Court decision), Arts. 34, 36, 55, 59, 70 and 72
- Rulebook on the bases and criteria for bankruptcy administrators' fees and costs (Official Gazette RS Nos. 1/2011 and 10/2012)
- Companies Act (Zakon o privrednim društvima), Art. 539
What to do
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1
Petition to open bankruptcy proceedings
Deadline: A creditor files the petition once they have made the existence of the claim and a bankruptcy ground plausible; the debtor files when one of the bankruptcy grounds exists (Art. 55 para. 3), and the Bankruptcy Law sets it no deadline in days; the liquidation administrator must file within 15 days of drawing up the opening liquidation balance sheet or report that shows over-indebtedness (Art. 539 of the Companies Act)
The petition is filed by a creditor, the debtor, or the liquidation administrator with the competent commercial court, together with evidence of at least one bankruptcy ground: a lasting inability to pay, an imminent inability to pay, over-indebtedness, or failure to comply with an adopted reorganization plan.
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2
Preliminary bankruptcy proceedings and payment of the advance
Deadline: As a rule, up to 30 days from filing the petition
The court checks whether a bankruptcy ground actually exists, appoints a temporary bankruptcy administrator if needed, and may order measures to preserve the debtor's assets. The petitioner pays an advance toward the costs of the proceedings, the amount of which depends on the debtor's size (micro, small, medium, or large legal entity).
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3
Opening the bankruptcy proceedings and appointing the bankruptcy administrator
Deadline: The court, as a rule, decides on the petition within 30 days of it being filed
The decision to open bankruptcy is published on the court's notice board and in the Official Gazette; deadlines in the proceedings start running from the day it is posted on the notice board. The court appoints a bankruptcy administrator from the list of licensed administrators, as a rule by random selection.
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4
Filing creditors' claims
Deadline: Within the deadline set by the decision opening bankruptcy, which may not be shorter than 30 or longer than 120 days from publication of the notice (Art. 70)
Claims that creditors do not file within this deadline are, as a rule, precluded (extinguished for the purposes of these proceedings), except for the exceptions provided by law.
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5
First creditors' assembly
Deadline: No later than 40 days after the bankruptcy is opened (Art. 36 para. 2)
The creditors' assembly (and the creditors' committee, if one is formed) decides on the further course of the proceedings - continuing as bankruptcy liquidation or as reorganization under a plan.
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6
Examination hearing and establishing claims
Deadline: No earlier than 30 and no later than 60 days after the deadline for filing claims expires (Art. 72 para. 2)
The bankruptcy administrator and creditors can dispute claims filed by other creditors; if a disputed claim is not resolved within the bankruptcy proceedings, it is further decided in civil litigation.
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7
Liquidating the assets and settling creditors (bankruptcy liquidation) or carrying out the plan (reorganization)
Deadline: Depends on the scope of the assets and the adopted liquidation plan, or on the pace of carrying out the reorganization plan
In bankruptcy liquidation, the bankruptcy administrator sells the debtor's assets (by public auction, collecting bids, or direct agreement) and settles creditors in order of priority. In reorganization, the debtor continues operating under a plan that changes the terms and pace of settling its obligations to creditors.
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8
Closing the bankruptcy proceedings
Deadline: Once the liquidation of assets and distribution of funds to creditors is complete, or once the reorganization plan has been carried out
In bankruptcy liquidation, the decision closing the proceedings is forwarded to the Business Registers Agency for the bankruptcy debtor to be struck from the register, at which point it ceases to exist as a legal entity. Where reorganization is carried out successfully, the debtor continues operating.
Required documents
- Petition to open bankruptcy proceedings, with evidence of a bankruptcy ground
- Proof of payment of the advance toward the costs of the proceedings
- The debtor's financial statements (balance sheet, income statement), to establish over-indebtedness and inability to pay
- A list of the debtor's assets and liabilities
- Creditors' claim filings, with evidence of the basis and amount of the debt
- The bankruptcy administrator's report on the debtor's economic and financial position
- A reorganization plan, if the proceedings are conducted by that route
- Check with the competent commercial court whether additional documentation is needed for the specific case (for example, an NBS confirmation of accounts or a cadastre extract for real estate)
Jurisdiction
Bankruptcy proceedings are conducted by the commercial court with jurisdiction over the debtor's registered seat (or, in cross-border cases, the place of the debtor's main center of interests). The proceedings are led by the bankruptcy judge, while the bankruptcy administrator manages the debtor's assets and business, with the participation of the creditors' assembly and the creditors' committee (if formed). Professional oversight of bankruptcy administrators is carried out by the Agency for Licensing Bankruptcy Administrators (ALSU), while the Business Registers Agency (APR) keeps records of bankruptcy proceedings and carries out the debtor's removal from the register once bankruptcy liquidation concludes.
What it costs
| Item | Amount | Basis |
|---|---|---|
| Advance for opening bankruptcy proceedings (costs of the preliminary proceedings) | Set by the court, but not more than RSD 50,000 for micro, RSD 200,000 for small, RSD 600,000 for medium-sized and RSD 1,000,000 for large legal entities; paid within five days of the court's order (Art. 59 of the Bankruptcy Law) | Bankruptcy Law (Zakon o stečaju) |
| The bankruptcy administrator's fee and expense reimbursement | Set by the bankruptcy judge during and at the end of the proceedings, according to prescribed criteria; the amount depends on the value of the bankruptcy estate and the stage of the proceedings | Bankruptcy Law (Art. 34) and the Rulebook on the bases and criteria for bankruptcy administrators' fees and costs ('Sl. glasnik RS', nos. 1/2011 and 10/2012) |
| Costs of publishing notices and other court costs during the proceedings | Depends on the scope of the proceedings, the number of creditors, and the type of assets | Bankruptcy Law |
| Lawyer's fee for representing a creditor or the debtor in bankruptcy proceedings | In practice most often agreed as a flat fee or under the Attorneys' Fee Schedule, depending on the value of the claim and the scope of representation; the tariff calculation multiplies the number of points by the point value (RSD 50 as of July 2025) | Attorneys' Fee Schedule (Tarifa o nagradama i naknadama troškova za rad advokata) (Bar Association of Serbia) and/or a separate flat-fee agreement with the client |
FAQ
Who can file for bankruptcy?
The petition is filed by a creditor, the debtor, or the liquidation administrator with the competent commercial court. A creditor does so once they have made plausible both their own claim and a bankruptcy ground on the debtor's side - as a rule, a lasting inability to pay. The debtor files when one of the bankruptcy grounds exists, and the Bankruptcy Law sets no deadline in days for that (Art. 55 para. 3). Under the Companies Act, the liquidation administrator must file within 15 days of drawing up the opening liquidation balance sheet or report that shows the assets are insufficient to pay creditors (Art. 539).
What is the difference between bankruptcy liquidation and reorganization?
Bankruptcy liquidation means selling off (liquidating) the whole of the debtor's assets and settling creditors from the proceeds, after which the debtor ceases to exist as a legal entity. Reorganization is an alternative in which the debtor continues operating under a plan that changes the terms and pace of settling its obligations to creditors. Whether the proceedings are conducted as liquidation or reorganization is decided by the creditors, as a rule at the first creditors' assembly, or in advance, through a pre-packaged reorganization plan the debtor files together with the petition itself.
How long do bankruptcy proceedings take?
According to published data on concluded proceedings before the commercial courts, the average duration is around two years and ten months, but individual proceedings - particularly over socially-owned assets or disputed property - take considerably longer, in some cases several years. Certain stages have indicative statutory deadlines (for example, the preliminary proceedings, as a rule, last up to 30 days), but the total duration depends mostly on the scope of the assets, the number of creditors, and any disputes over filed claims.
Can liquidation turn into bankruptcy?
Yes. If, during voluntary liquidation, the liquidation administrator establishes that the company's assets are insufficient to settle all filed creditors' claims, they are required to file a petition to open bankruptcy proceedings within 15 days of drawing up the opening liquidation balance sheet or report (Art. 539 of the Companies Act). The administrative liquidation procedure before the APR is then suspended, and the case continues as judicial bankruptcy proceedings before the commercial court.