Page 102 - Albanian law on entrepreuners and companies - text with with commentary

Comments:

1. During the 2011-2012 discussion process for the amendments to the 2008 Company
Law it was clear that the traditional Albanian practice, i.e. before the 2008 Company Law,
was used to validate transfers of shares. When shares were transferred of the contractual
provisions were not recognized unless they were notarized. This was not intended in the 2008
Law despite Article 73. During the 2011-2012 review of the Company Law a proposed
amendment was proposed to clarify the law and make it clear that a notarizing process is not
necessary during transfers of shares. The proposed amendments show that the title is secure
when the contract is valid and completed. The amendments also follow the demands
submitted by the stakeholders in relation to the issues they have encountered in the NBC
procedures for registering limited liability company share transfer agreements. The
amendments to Article 73 (2) intend to facilitate those NBC procedures.
LLCs are designed to meet the needs of small and medium sized enterprises. They are
typically financed by a limited group of members who are willing to raise the company’s
capital without calling on the public, because they themselves want to be exclusively in
control of their enterprise. Therefore, the transfer of shares may also be typically subject to
statutory requirements which prevent an easy transfer of shares to third parties, Article 73 (3).

Article 74
Consequences of Transfer
(1) If a share is being transferred, the transferor and transferee shall be jointly and
severally liable to the company for obligations associated with the membership from the
moment of transfer of shares until the transfer has been registered as of paragraph 2.
(2) The company shall register the change of owner in accordance with Article 43
of Law No. 9723 on the National Registration Centre. Such registration has declarative
effects.

Comments:

The consequences of share transfer by contract (paragraph 2 of Article 73) deserve a
specific note: Article 74 (2) establishes that the ownership of the share is deemed transferred
based on the provisions of the contract. Transfer of ownership is not linked to NBC
registration. The NBC just registers the new owner. In other words, NBC registration of the
transfer does not play any formal role in transferring the right here. Also, due to the
deregulation strategy regarding LLCs, no book of members is required registration in which
would be part of the ownership transfer. This is now a major difference between the JSC
regime and the LLC system (see Articles 117 (2), 119 for JSCs).

101