Page 137 - Albanian law on entrepreuners and companies - text with with commentary

this time. This was a difficulty if the contribution was in kind where there were some
formalities to make sure that the contribution was properly valued, while other laws provide
for special procedures in the case of transfer of ownership, especially in the case of
immovable property, which might delay the process of incorporation for joint-stock
companies. In addition, under special procedures of transfer of ownership, especially in the
case of immovable property, prior registration of the company in the NBC is required. In
order to further simplify the process of registration for joint-stock companies with equity
comprised of contributions in kind, it was deemed reasonable to clarify that the obligation of a
shareholder to transfer the contribution in kind will be deemed as complied with once the
shareholder has signed any acts required for transferring the ownership title to the
contribution in kind; and after the registration of the company, the rest of legal procedures
(e.g. the registration of the ownership transfer with the Immovable Property Registration
Office) are followed by the Managing Director.
In case founders do not pay or transfer their contributions in time, the company may
choose to subject the founder to the procedure of Article 124 on untimely payments. Founders
are liable for any damage to the company resulting from untimely payment in accordance
with Article 10, Article 113 (3). The provision of Article 124 is not located among the rules
regarding formation as it is also applicable to payments required from (future) shareholders
when the company already exists.
As well as this shares may not be issued before registration of the company, as
registration is only possible if contributions have been paid up according to Law and Statute,
Article 109 (2).

2. Formation costs are only refundable to founders up to an amount established by the
Statute, Article 111 (1). Such costs can be both compensation of expenses and remunerations
connected to the foundation. Expenses are payment of contributions, taxes, fees, share
certificates where they are produced, Article 118 (3). The remuneration regards either the
founders or other persons employed during the formation for expertise and consultancy. By
establishing and disclosing the formation amount in the Statute, the Law tries to avoid the
situation where founders (or others) use the foundation for their private benefit and to the
disadvantage of shareholders and creditors. Such formation costs will be paid by the new
company which could find itself immediately with a burden of (formation) debts. Therefore,
Article 111 (2) requires that the formation costs will only be paid once the company succeeds
in producing profits. Shareholders may then decide to give it priority.
It should be noted in this context that Article 36 (1) g) Business Registration Law still
refers to a concept of ‘special advantages’. The Business Registration Law should be
amended in this respect and this letter be cancelled from the list of statute / registration
requirements because the Company Law does not allow any ‘special advantages’ during the
formation phase which would require to be listed in the Statute in order to be compensated.
The idea of ‘special advantages’ does not comply with the new corporate governance spirit

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