Can Electronic Signature Save Your Business During the COVID-19 Outbreak?

31
Mar 2020

It is not surprising that Coronavirus (Covid-19) has disrupted your business. However, in the modern world, a vast portion of business activities are regularly done online, as business partners in cross-border matters are often forced to sign the documents remotely. The powerful weapon that provides them this luxury is a technology that enables authentication of signatures, called – the electronic signature.

It seems even more useful when the whole globe is strongly advised to stay at their homes. In the following text, find out what are the parts of your usual business routine that would not be interrupted during the Covid-19 outbreak, thanks to the electronic signature.

Electronic Signature Is Valid Under the Serbian Law

Let’s clarify at the beginning that the qualified electronic signature is valid under the Serbian law.

The field is regulated by the Law on Electronic Document, Electronic Identification and Trusted Services in Electronic Commerce.

The electronic signature, issued by one of the Certification bodies of the Republic of Serbia, which satisfies the technical requirements of a qualified electronic signature will have the same legal effect as a handwritten (wet ink) signature.

You may find further information on the qualified electronic signature in Serbia in our blog post A Short Guide to Using the Electronic Signature.

Is It Possible to Obtain the Electronic Signature During the Covid-19 Outbreak?

Once you get aware of all the benefits of using the electronic signature, the question remains whether it is possible to obtain an electronic certificate during the Covid-19 pandemic. We investigated this question for you.

The majority of the Certification bodies in Serbia provides their services online – in other words, they received the applications for the electronic signature accompanied by the rest of the documents electronically even before the pandemic started.

With this in mind, some of the Certification bodies (precisely, the Serbian Chamber of Commerce) have changed the procedure at some point and developed it, in order to encourage the online system of application.

What all of the Certification bodies in Serbia have in common is that they advise avoiding physical visits, unless in urgent cases.

Halcom even suspended any kind of physical presence in their business premises, while the only way to obtain the electronic signature from this Certification body is online.

As well, the working hours of all Certification bodies are reduced, in accordance with the Government’s instructions.

It is useful to mention that the last information obtained by the police department of the Ministry of Internal Affairs (as a Certification body) is that it is not possible to obtain their electronic certificate, although no statement on this topic was published on their website or in the media to this date.

To conclude, during the situation when people are advised to practice social distancing and avoid personal contact in every possible way, IT IS possible to obtain the electronic certificate and enjoy all the advantages this kind of communication provides.

Please, keep in mind that the Certification bodies, which provide the service of delivering the electronic signature to your home address (for example, Halcom), can do so only to the applicant in person! In other words, there is no possibility to authorize someone to bring your electronic signature for you.

What About the Conclusion of Commercial Contracts with Your Business Partners During the Covid-19 Outbreak?

You were negotiating with your suppliers (or other business partners) for a long period and the pandemic disturbs you to finally enter into the contract.

Because of that, you are curious to know whether it is possible to enter into the contract now, when the physical signing is not possible.

Since a lot of our clients do their business online and this kind of cooperation with their partners is customary, we are aware of the fact that the public, in general, is curious about this question.

Namely, entering into a contract shall not be subjected to any form unless otherwise specified by the law.

To translate it to “non-legalese”, you are not supposed to conclude your contract in any specific form unless the Law prescribes the specific form. For example, since the Serbian Law prescribes a mandatory notarization by Notary Public of the Contracts of Business Premises Purchase, as well as Agreement on the Transfer of Shares in LLC, you are not allowed to sign these Contracts electronically. On the other hand, for the vast majority of the Contracts, the particular form is not prescribed by Law. If it is a case, you are legally allowed to enter into the contract by signing it with an electronic signature.

As a tip, we would advise you to consider including a clause (or statement) in your Contract to describe an intention to authenticate with an electronic signature.

Be aware of the fact that the Contract shall be concluded after you and your partner have agreed as to the essential terms of the Contract.

It is worth emphasizing that most commercial contracts can be concluded even orally – without writing (and, therefore, without the electronic signature). Nevertheless, such situations easily may end up in a long dispute due to misunderstanding of the parties on what the agreement was. For this reason, the best way is to write the contractual terms down and sign as previously suggested.

Cooperation with the Public Authorities During the Coronavirus Pandemic – What Should You Know?

Since online communication with the public authorities in Serbia has increasingly developed from the time we wrote our last blog on this topic, nowadays, it is possible to complete a lot of your duties from your home. Namely, the online platform eUprava provides a bunch of services to its users.

In case you choose to create an account by using the qualified electronic certificate, all the services provided by eUprava are available to you.

Are You Able to Set Up a Company During the Covid-19 Outbreak?

In the Serbian Business Registers Agency, the service of electronic registration of the establishment has been enabled for:

  • entrepreneurs – since January 1, 2018, (find more in our blog Online Registration of Entrepreneurs)
  • single-member LLC – since October 17, 2018,
  • multi-member LLC – since June 28, 2019.

That means that registration of the establishment of a company is already possible from your home, which is a widely affirmative practice in the process of digitalization. The ones who wish to set up a company in the near future are not supposed to postpone their plans until the end of the pandemic.

In that process, the first step would be creating a user account in the Centralized Registration System for the Serbian Business Registers Agency users. Payment cards such as Visa, Master Card or Dina are required as well, in order to be able to perform the payment.

Then, your qualified electronic signature, as well as the electronic reader on your computer take over the stage. The process of signing with the electronic signature is possible by using the NexU-APR application. Please find the technical guidelines here.

The last step would be issuing a registration decision by the Serbian Business Registers Agency, that would be available on your user account. It is an electronic document that is valid only in electronic form.

To be able to submit an e-registration form, several more conditions have to be fulfilled:

  • e-fee has been paid,
  • e-application form has been signed with an electronic signature issued by one of the five Certificated bodies in the Republic of Serbia,
  • unique personal identification number (JMBG) or the registration number for foreigners, which is contained in the applicant’s electronic signature, would be identical to the unique personal identification number (JMBG) entered as a piece of information in the field “applicant”.

When submitting an e-application, all electronic documents enclosed have to be signed with the electronic signature of the authorized person issued in Serbia. We would like to emphasize this fact, since it is not possible to use the electronic signature before the Serbian authorities, issued in any other country unless the Republic of Serbia.

As a practical tip, we would like to mention that for the multi-member LLC the Decision of the Establishment of the LLC has to be signed by electronic signatures by all of the future members of the LLC (founders).

Last but not list the tip would be that currently, the e-application is possible only for the incorporation of the LLC (both single-member and multi-member) when the founder is a domestic or foreign natural person or domestic legal entity.

Online Dispute Resolution During the Covid-19 Outbreak?

Since no kind of electronic communication is possible with courts in Serbia, ironically, your disputes have to be postponed for some calmer times.

Namely, it is not possible to initiate the proceedings before the court in Serbia electronically, as well as it is not possible to submit your testimony as a witness or expert witness signed with an electronic signature.

Because of that, unfortunately, there are no advantages to using an electronic signature regarding the court proceedings.

On the other hand, maybe this tough time is a good environment to challenge the efficiency of alternative dispute resolution ways, such as negotiation, arbitration and mediation. It is not rare that business partners first initiate proceedings before the court after the break of their cooperation, and when they realize the (economic) consequences of such a process, they run into mediation or negotiation, putting it to a second place, which is a wrong practice from our standpoint.

These techniques, a.k.a. alternative dispute resolution should be developed in the first place, before commencing the proceedings before the court.

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