The legal regime of the Control Agreement in the new Serbian Company Act

The article deals with the legal aspects of control agreement (an agreement by which one company - the parent, acquires the right to manage the other company - the subsidiary) in the new Company Act, which was enacted in 2011. It provides the critical analyses of the Company Act provisions governing control agreement against the background of the previous legislation and best comparative practices. The following issues have been addressed in the article: the notion of the parent and the subsidiary company; the conditions for entering into the control agreement and the presumption of control; the scope of the perent’s company power over the management of its subsidiary (i.e. the scope of the parent company’s binding directives), and the rules governing amendments and termination of the agreement. The article argues that the new Company Law, while offsetting some of the setbacks of its predecessor, still fall short of providing clear-cut answers to a number of issues pertinent to the control agreement, such as who can be a party to the control agreement, the mandatory content thereof, as well as the legitimate instruments of ratification of the governing agreement by the subsidiary company which operates in the form of partnership.