BOSNIA & HERZEGOVINA Law and Practice Contributed by: Bojana Bošnjak-London and Ezmana Turković, Marić & Co
7. Disclosure 7.1 Making a Bid Public
in the case of mergers, extraordinary financial accounts may be required. 7.4 Transaction Documents The need to disclose transaction documents depends on the type of the companies involved and the level to which they are regulated. For instance, in the case of the acquisition of shares in private, non-regulated limited liability compa - nies, disclosure obligations are quite modest and transaction documents often include a short- form share purchase agreement to be provided to the authorities for registration purposes. How - ever, in the case of regulated and/or joint stock companies, the disclosure obligations are more stringent, with regulators frequently requesting full details of the transaction. Directors are generally responsible for ensuring that the company’s operations comply with the law. As a result, although their duties are mostly owed to the shareholders, they always have to make sure that all of their actions are lawful and in the best interest of the company. 8.2 Special or Ad Hoc Committees It is not common for boards of directors to establish special or ad hoc committees in busi - ness combination deals. 8.3 Business Judgement Rule There is limited court practice to draw on in this area; however, it is generally accepted that if directors act in good faith, with due care and in the best interests of the company and its shareholders, they will be protected from liabil - ity, unless they undertake unlawful actions. The degree of judicial deference afforded to board 8. Duties of Directors 8.1 Principal Directors’ Duties
As soon as the takeover threshold is achieved, the acquirer is obliged to immediately (the next day) inform the public and the regulator about the acquisition and the planned issuance of the takeover offer. Subsequently, the takeover offer must be submitted to and approved by the regu - lators before it is published. 7.2 Type of Disclosure Required The disclosure requirements for the issuance of shares in a business combination vary depend - ing on the type of entities involved (limited liabil - ity companies v joint stock companies, regulat - ed or non-regulated, etc), but generally include detailed information to ensure transparency for shareholders, regulators, and the market. If the shares are issued to the public, a pro - spectus is required, detailing the terms of the issuance, risks, financial statements, and the impact on shareholders. Such issuance is sub - ject to regulatory approval and scrutiny, as well as regulatory filings. Furthermore, public compa - nies often issue proxy statements or circulars to inform shareholders about the share issuance, including voting rights, dilution effects, and fair - ness opinions. In case of mergers, companies must disclose the terms of the transaction, including share exchange ratios, consideration structure, and any conditions precedent, as well as how the share issuance affects earnings per share, the ownership structure, and capital structure. 7.3 Producing Financial Statements The need to prepare extraordinary financial statements depends on the nature of the corpo - rate transaction that is in question. For instance,
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