On 15 December 1757, the Empress Maria Theresa approved and signed the Statute of the Town of Karlobag. The Statute was written in the Italian and the Croatian language in Trieste. The printed sample was also signed by the Empress Maria Theresa, with a large imperial seal underneath.

The Statute was divided into 24 articles and three units. The titles of the articles were written exclusively in Italian. By its volume, the Statute was very short encompassing only administrative, police and judicial affairs. With the regulations and provisions that it contained, the purpose of the Statute was to set up a town administration and courts and to connect them to Senj.

Statut trgovačkog i primorskog grada Karlobaga

The town was governed by the royal castellan or commander (porkulab) subordinated to the Governorship in Senj. Caring for the wellbeing of the citizens was the town municipality with a magistrate as its head. The elections for the members of the magistrate took place every year on the Day of St. Michael, elected being the candidate with the majority of the votes. At the elections, a judge was elected, two counsellors among the citizens, a health officer, two counsellors caring for the poor, one counsellor for church issues, a caretaker of measures, an indefinite number of executors of justice known as the righteous and a church property manager.

The judge, two counsellors for the economy, a lifelong caretaker for health and a notary were appointed upon the proposal of the castellan, while all the other members of the magistrate were subject to elections. However, it is unclear why the judge was elected when he was appointed upon the proposal of the castellan and why the patriciate did not elect two counsellors from their own ranks.

The castellan administration and the town magistrate were comprised of two judges and four counsellors who were carrying out their duties according to the Statute and other regulations, often referring also to the Statute of the Town of Senj.

In commercial disputes and severe penal cases, the magistrate and the castellan administration in Karlobag depended on the court and Governorship in Senj.

The regulations and provisions of the Karlobag Statute were very scarce and mostly vague. The town municipality entirely depended on the castellan, a counsellor to the court, and all the other bodies of the magistrate.