Most foreign owners of a Montenegrin company think about director liability once — when they appoint someone local because the company needs a registered representative. The assumption is that liability sits with whoever signs. The Companies Act reaches considerably further than that, and it contains two rules about board voting that reverse the instinct almost everyone brings from home.
All article numbers below are read from the consolidated text of the Zakon o privrednim društvima ("Službeni list Crne Gore", nos. 090/25 and 121/25), in application since 1 January 2026, on 5 September 2026. General information, not advice on a specific file.
⚠ The consolidated text used carries 090/25 and 121/25. The Act was also amended by "Službeni list CG" 44/2026, and whether that amendment touched this part could not be verified from the primary text in this research. Check the amending act before relying on the numbering for a live matter.
Who actually owes the duties
The first surprise is the width of the net. Article 44(1) lists the persons who owe special duties to the company, and it is not a list of job titles:
| # | Who | Why it matters to a foreign owner |
|---|---|---|
| 1-3 | Partners; d.o.o. members with significant participation or control; shareholders in the same position | Ownership alone can bring duties |
| 4 | The director and members of the board of directors, management board and supervisory board | The expected group |
| 5 | Persons who take actions falling within the competence of those bodies without having been appointed to the role | The de facto director — no appointment, same duties |
| 6 | Persons on whose orders and instructions the persons in 4 and 5 regularly act over a longer period | The shadow director — this is where a foreign parent lands |
| 7 | Other representatives under Article 35, and prokuristi | Powers of representation carry duties |
| 8 | The liquidator | Duties continue into wind-down |
| 9 | The company's auditor |
Article 44(2) allows the founding act or statute to add further persons.
Item 6 deserves a sentence of its own. A parent company that runs its Montenegrin subsidiary by instruction — where the local director regularly and over a longer period acts on the group's directions — is a person with special duties under the Act, whether or not anyone from the parent appears in the register. The register is not the liability map.
The standard: a good businessman, measured against what you personally know
Article 46(1) requires the persons in items 4 to 9 to act conscientiously, with the care of a good businessman, in the reasonable belief that they are acting in the best interests of the company as a whole.
Article 46(2) defines that care as the degree a reasonably careful person would show who possesses the knowledge, skills and experience needed to perform the duties in question. So far this is familiar.
Article 46(3) is the part that is not. If the person possesses specific knowledge, skills or experience, those are taken into account when assessing the care they should have shown. The standard is not purely objective: a director who is a qualified accountant is measured against what a qualified accountant should have seen. Appointing a specialist to a board raises that person's own exposure.
Article 46(4) provides the counterweight. Decisions may be based on information and opinions of persons expert in the relevant field, where the director reasonably believes those persons acted conscientiously. Reliance on advice is protected — but only reasonable reliance on people who were themselves careful.
The business judgment rule, and its three conditions
Article 47(1) gives a safe harbour. A person is deemed to have acted with due care in taking a business decision if all three of the following hold:
- the transaction is not one in which that person has a personal interest;
- the decision was taken on the basis of information the person reasonably believed to be adequate, having regard to all the circumstances; and
- the person reasonably believed the decision was in the best interests of the company.
The three conditions are cumulative, and the first is the one that fails most often in group structures. A decision to contract with an affiliate of the parent is not protected by the rule, however commercially sensible it was — the safe harbour simply does not apply, and the decision has to be defended on the ordinary standard instead.
Related-party transactions: disclose before, not after
The safe harbour in Article 47 fails on personal interest, and the Act then sets out precisely what that means and what has to happen.
Article 49(1) obliges a person under Article 44 to notify the company of a personal interest — their own or that of a related person — in a transaction the company is about to conclude or an action it is about to take. Article 49(3) fixes the timing: the notification must reach the company before the transaction is concluded or the action taken. A disclosure made afterwards does not cure it.
Article 49(2) sets the content, and it is more than a bare declaration. The notice must give the name of the person concerned, the nature of the relationship between the company and that person with emphasis on the nature and extent of the personal interest, a detailed description of the transaction, its value, the planned date, and any other information needed to assess whether the transaction is fair and reasonable from the perspective of the company and of the members who have no personal interest.
Article 49(4) defines personal interest in three limbs: a transaction between the company and that person or a related person; an action by the company towards that person or a related person — the examples given include waiving a right and steps taken in court and other proceedings; and a transaction with a third party where that third party is in a financial relationship with the person or their related person and it can be expected that the relationship will influence how they act. Article 49(5) defines those financial relationships as debtor-creditor relationships and others where a connection of economic interests can be established.
Approval then follows a specific route. Article 50(1)(2): in a d.o.o. and an a.d., the transaction is approved by a majority of the votes of all members of the board of directors or the supervisory board who have no personal interest. Article 50(2) deals with the case where all of them are conflicted or too few are left for a quorum.
For a group structure this is the provision that turns intra-group contracts into a documented process rather than an internal decision.
The loss trigger: half the capital starts a three-month clock
Article 333 turns a balance-sheet event into a board obligation. If, when preparing the annual reports or in any other way, it is established that the company has a loss amounting to up to half the share capital, the board must convene the general meeting as soon as possible to examine whether measures should be taken or a liquidation resolution adopted.
Article 333(2) puts a hard limit on the delay: the meeting must be held within three months of the loss being established. Article 333(3) requires the convening notice to carry a report on the company's financial position and, where necessary, proposed measures — including a draft resolution on liquidation.
This obligation is written in the chapter on the joint-stock company, but it does not stay there. Article 430 applies Articles 316, 333 and 334 to the director of a limited liability company mutatis mutandis. A d.o.o. director carries the same loss trigger and the same liability regime.
Where liquidation does become the answer, the solvency gate matters: Article 603(1) permits liquidation only where assets exceed liabilities at the date of the decision, which is why the three-month meeting is the moment to establish which exit is still available.
The two voting rules that reverse the instinct
Article 334(1) states the basic rule: members of the management bodies are liable for damage caused to the company by breaching the Act, the statute or resolutions of the general meeting. Article 334(2) carves out damage arising from implementing a general-meeting resolution — carrying out what the owners resolved is not the director's liability.
Article 334(3): where more than one member is responsible, they are liable jointly and severally.
Then the allocation rules, and this is where practice diverges from expectation.
Article 334(4): where the damage results from a decision of the board of directors, the supervisory board or the management board, those who voted for the decision are liable.
Article 334(5): 🔴 if a member abstained, they are treated, for the purposes of that liability, as having voted for the decision.
Article 334(6): 🔴 if a member did not attend the meeting at which the decision was taken and did not vote for it in any other way, they are also treated as having voted for it — unless, within eight days of learning that the decision was taken, they raise a written objection to it.
Read together, the two paragraphs remove the two most common ways directors think they stay clear of a decision. Abstention is not neutrality here; it is a vote in favour. Absence is not distance; it is a vote in favour with an eight-day escape hatch that has to be used in writing and that starts running from knowledge, not from the meeting.
For a non-resident director on a group board, the practical consequence is procedural: someone has to be told about every board decision promptly enough that the eight days can still be used, and the objection has to be recorded in a form that survives later.
Article 334(7) sets the limitation period: the company's right to claim compensation prescribes in five years from the day the damage arose — not from the day it was discovered.
Who can sue, and what happens if the company has no director at all
Article 48 gives the company a direct claim: it may sue a person under Article 44(1)(4) to (9) for compensation for damage caused by breach of the duty of care in Article 46. Combined with the five-year period in Article 334(7), the exposure is not short.
There is also a rule that matters when a director resigns or is removed and nobody replaces them. Article 316(1): if the company is left without any executive director and a new one is not registered in the CRPS within 60 days of the registration of the previous director's departure, a shareholder or other interested person may apply to the court, in non-contentious proceedings, to appoint a temporary representative with the rights and duties of an executive director until a new one is elected.
The procedure is fast and hard to resist. Article 316(2): the applicant may propose a person, but the court is not bound by that proposal. Article 316(3): the court must decide within eight days of receiving the other side's response, or of the response period expiring. Article 316(4): the decision goes to the CRPS within three days for registration. Article 316(5): an appeal does not suspend execution of the decision.
Article 430 applies Article 316 to the limited liability company as well. So an owner who leaves a Montenegrin d.o.o. without a registered director is not simply in default of a filing obligation — after 60 days any interested person can have a representative appointed over the company, chosen by the court rather than by the owner, with the appeal offering no delay.
What this changes in practice
- Map the duty holders, not the register. If the group instructs the local director as a matter of routine, Article 44(1)(6) is engaged. That is a structuring question, not a paperwork one.
- Minute the basis of decisions, not just the outcome. Article 47(1)(2) protects decisions taken on information reasonably believed adequate; a minute that records only the resolution proves nothing about the information.
- Flag related-party items before the vote. A personal interest removes the safe harbour entirely under Article 47(1)(1).
- Give absent directors real notice. The Article 334(6) objection runs from knowledge and lasts eight days; a board pack circulated late destroys it.
- Never record an abstention as a neutral act. Under Article 334(5) it is a vote in favour. A director who disagrees must vote against and have it minuted.
- Watch the capital threshold. A loss reaching half the share capital starts the Article 333 three-month clock, and it applies to d.o.o. directors through Article 430.
Before your next board meeting
If you own a Montenegrin company through a group, the exposure sits in the gap between who signs and who decides. Send us the current board composition, the last two sets of minutes and the group's instruction lines, and we will map who owes duties under Article 44, whether the decision record supports the Article 47 safe harbour, and what a non-resident director needs to receive to be able to use the Article 334(6) objection at all. Our corporate law page sets out the scope; the structural choice behind it is covered in branch or subsidiary, and the reorganisation gates in merging or splitting a Montenegrin company.
