Page 109 - Albanian law on entrepreuners and companies - text with with commentary

(2) Should, contrary to paragraph 1, the General Meeting not be convened or the
issue in question not be put on the agenda, any member who has been party to the
request as of paragraph 1.
a) may ask the Court to make an order declaring that the management will be in
breach of their fiduciary duties if they fail to accede to the shareholders’ request within
15 days, or
b) require the company to purchase his shares.
(3) In case the agenda is amended in accordance with paragraphs 1 and 2 and the
Managing Director had already sent the agenda to the members, the new agenda is sent
in accordance with paragraph 1 of Article 83.
(4) The authorized representative must disclose any such facts or circumstances
that in the judgment of the represented member, could affect the decision-making of the
representative in favour of interests other than those of the represented member.

Comments:

1. In the absence of capital market rules or stock exchange regulations, the protection of
minority members in LLCs depends exclusively on company law provisions. In the Company
Law, protection of the position of investors’ is very much reliant on the contents of
management’s fiduciary duties as against shareholders and among shareholders which we
discussed above in Comments to Article 14 to 18. Moreover, the Company Law provides
rules on groups of companies which also include minorities’ rights, Article 205 to 212.
However, there are also other provisions protecting minorities of members throughout the
LLC section of the Company Law.

2. One of them is Article 84 which provides the right for a 5% minority to request the
Managing Directors in writing to convene a General Meeting and/or to put certain issues on
the agenda. It is possible that there could be a problem if there were no Managing Directors,
perhaps if there was in a case of a vacancy, death or insanity. This situation was considered
during the 2011-2012 review of the Company Law. In the discussions a majority of the
stakeholders considered that this situation would not frequently happen. If this occurred the
fact that the General Meeting must be held annually (for LLCs) would normally normalise the
situation. As well as this the shareholders of 5% of the company can convene a GM (Article
84(1)) anyway. Some minority stakeholders of the 2011-2012 review of the Company Law
thought that there should be a proposed amendment to fill this possible lacuna. However the
problem of regulating extreme situations is that it is cumbersome to legislate for all risks. It
would be possible to amend the Company Law for LLCs to make it mandatory to have a
deputy Managing Director but the LLC was intended to be a simple piece of legislation
focused on the business community; perhaps a better solution would be to consider soft law
provision either/or in the Corporate Code, the Statute or in the Model Articles should a
particular company want this in the Statute.

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