The topic of archiving business documentation came into focus in 2020, when the new Law on Archival Materials and Archival Activities was adopted.

This Law introduced new obligations for the business sector related to sorting, storing, and destroying paper documentation.

At that time, electronic documentation was left aside, and the prescribed obligations did not apply to it.

The situation changes as of January 1st, 2024, when the Regulation on Uniform Technical-Technological Requirements and Procedures for the Storage and Protection of Archival Materials and Documentary Materials in Electronic Form comes into force.

In the following sections, we will attempt to highlight the most important obligations for the private sector, for which this subject matter is generally unfamiliar, complex, and difficult to implement.

Definitions: Documentary Material and Archival Records

At the outset, it is important to understand the scope of this Law, which includes:

• documentary material, and

• archival records.

Documentary material comprises all documents or records created through the work of public entities, businesses, and individuals, in various forms and formats, as well as the records maintained about those documents.
In other words, the documentary material of a company includes all issued and received invoices, current account statements, employment contracts, contracts with business partners, payroll slips, various decisions, declarations, internal acts, tax returns, records of received invoices or other documents, attendance records, etc.
Practically speaking, any records with business relevance form part of a company’s documentary material.

Archival records are documentary materials that must be permanently preserved.
For example, payroll calculations and salary records, which are legally required to be stored permanently, constitute archival records.

The retention periods for documentation are regulated by various laws. For instance, the Law on Business Companies mandates that the founding act, the company registration decision, and the general acts of the company be stored permanently. As such, these documents acquire the status of archival records.

Electronic Documentary Material and Its Specific Treatment

Of particular interest is the definition of documentary material in electronic form, especially in light of the upcoming application of the aforementioned Regulation.

Electronic documentary material refers to materials originally created in digital form.
For example, this includes an electronic invoice—a bill generated on a computer, delivered to the customer in digital format, and possibly signed with a qualified electronic signature.

An invoice that is generated on a computer solely for the purpose of being printed and delivered in paper form does not fall under the category of electronic documentary material.

Documents that a company is required to preserve permanently—thus qualifying as archival records—must not be damaged or destroyed, and must be stored in the form in which they were created.

For instance, if payroll statements are delivered to employees in digital format directly from business software to their email addresses, these constitute electronic documents, and must therefore be permanently archived in electronic form.

General Obligations of Legal Entities

The general obligations of legal entities, as creators and holders of archival records, are regulated by Article 9 of the Law on Archival Material and Archival Activities.
Key responsibilities for business entities include the obligation to:

• Appoint a responsible person for the protection and handling of documentation (both documentary material and archival records);

• Label, register, date, classify, and archive documents in a systematic manner;

• Adopt a general act (internal policy) governing the procedures for registration, classification, archiving, and preservation of archival records and documentary material;

• Develop a disaster recovery plan, i.e., a protection plan for archival records and documentary material in the event of disasters and emergencies;

• Compile a list of categories of archival records and documentary material, which must be approved by the competent Archive. This is an internal document that defines types of business documents and their retention periods;

• Inventory all folders, binders, boxes, and digital files in which documentation is stored, and enter them into the archival book, a record that must be submitted annually to the competent Archive by April 30th for the documents generated in the previous year. The archival book serves as the primary record of all archival and documentary material generated by the entity;

• Regularly remove expired documents—those for which the legal retention period has elapsed—for the purpose of lawful destruction;

• After 30 years, properly organize and list all archival records with permanent retention, and submit them to the competent public archive.

All newly established companies are required to notify the competent archive within 30 days of registration.
Companies must also report any changes to company status, such as address or name changes.

Specific Obligations Regarding Electronic Documentation

In addition to the general obligations, Article 11 of the Law on Archival Material and Archival Activities prescribes specific obligations for legal entities concerning electronic documentation.

Legal entities (note: only legal entities, not sole proprietors) are required to:

• Adopt a general act (internal policy) that regulates the procedures for registering, protecting, and using electronic documents;

• Use an information system (business software) that meets specific technical requirements for managing and storing electronic documentation;

• Establish internal rules for preparing electronic documents for long-term storage;

• Prepare documents for storage, which involves specific actions such as signing the document with a qualified electronic signature by the person responsible for its preparation;

• Maintain a log of actions undertaken during the preparation of electronic documents for archiving. This includes the date, time, location, document reference, and the person responsible for each action.
  A special log must be maintained containing 15 specific data fields about the person who created the document;

• Apply protection measures in accordance with the ISO/IEC 27001 standard.

The Decree on Unified Technical and Technological Requirements and Procedures specifies recommended formats for electronic document preservation, including but not limited to:

• PDF/A

• TIFF

• JPEG

• PNG

• PDF/E

Key Conclusions Regarding Business Sector Obligations Starting from January 1, 2024

As of January 1, 2024, both sole proprietors and legal entities are required to properly classify, label, store, and (in some cases) destroy business documentation.

However, only legal entities are additionally required to:

• Adopt internal general acts, including a list of document categories specifying:

  • the types of documents created or received in their operations,

  • the legally prescribed or internally defined retention periods.

This list must be approved by the competent public archive.

Legal entities must also adopt internal regulations for the preparation and storage of electronic documentation.

Sole proprietors are not subject to these obligations. They are only required to store their electronic documentation responsibly and properly.

It is not sufficient to simply store files on a local computer disk, in the cloud, or on external memory.
Electronic documents must be stored within an information system that meets certain technical and organizational standards.

The public sector will use the government’s eArchive portal, but the private sector must use another software solution that complies with legal requirements.

Before storage, documents must be “prepared” by:

• Converting them into an approved file format,

• Digitally signing them with a qualified electronic signature, and

• Recording all necessary metadata and tracking information (e.g., about the document and the person who created it).

Furthermore, ISO 27001-compliant security measures must be applied when storing electronic documentation.

General Notes and Challenges for Small Legal Entities

The system for storing and archiving electronic documentation is part of a broader framework for managing all business records, whether in paper or electronic form. Therefore, all general legal obligations apply to both formats.

There is no need to create a separate list of categories for electronic documents. The document category list is unified for both paper and electronic records.

The archival register (Arhivska knjiga) is also maintained integrally. It must include all binders, boxes, folders, and also collections of electronic documents, including their quantities and storage locations.

To clarify: there is no obligation to maintain a separate archival register solely for electronic records.

When reviewing the obligations imposed on legal entities regarding the processing and storage of electronic documents, it becomes evident that these requirements demand significant technical and time resources.

For small and micro legal entities, fulfilling all these obligations may be particularly challenging, and the requirements appear disproportionately burdensome for small businesses.

Companies with only a few employees—focused mainly on core business operations—typically lack the human resources to handle document preparation and maintain detailed logs for each document and action. For instance, just for identifying the document creator, the person preparing the electronic material must enter 15 specific data fields into the records.

Among professional circles, there is information that regulatory relief may be forthcoming via amendments to the Regulation, which would exempt legal entities from applying these procedures to documents already stored by state authorities, such as:

• Electronic invoices from the SEF system,

• Tax returns submitted through the eTaxes portal,

• Employee registration reports from the CROSO system, etc.

After reviewing the legal provisions, one could argue that true relief for small businesses would come from eliminating the obligation to maintain exhaustive metadata logs and instead focusing solely on secure retention of electronic documents in appropriate formats, with proper backup systems in place.