Podgorica, (MINA-BUSINESS) – At the request of several mayors, the Union of Municipalities of Montenegro (ZOCG) is preparing an initiative to extend the deadline for alignment with the new Law on Business Organizations, due to numerous challenges faced by municipality-owned companies.

During consultations with representatives of local administration regarding the content of the statutes of municipal enterprises, ZOCG Secretary General Misela Manojlovic explained that the Government had already prepared a Draft Law on the Management of Companies Established by the State or Municipalities at the end of last year, having recognized their specific nature and the need to regulate certain issues differently compared to other business entities.

“Municipality-owned enterprises perform activities of public interest within the original competencies of local governments and are therefore an inseparable part of the overall local self-government system,” Manojlovic stated. 

She said that, given that the law is still in the drafting process and that the deadline for harmonizing statutes and the overall operations of these and all other business entities with the current law is less than two months away, attempts to prepare new statutes have revealed numerous conflicts between the Law on Business Organizations and the Law on Local Self-Government, the Law on Utility Services, the Labour Law, the Law on the Prevention of Corruption, and many others.

According to Manojlovic, it is therefore impossible to draft new statutes without violating one of these laws, which in most cases prescribe high fines. This is particularly the case with single-member limited liability companies, which are the most common form at the municipal level.