Page 144 - Albanian law on entrepreuners and companies - text with with commentary

Shares may usually be freely transferred. Article 120 provides that the Statute may set
conditions on the share transfer, in particular to subject it to the consent of the management or
to a pre-emption right for the other shareholders. This is a good way of avoiding dispersed
ownership and gives the company a closed form (see Comments to Article 105). It is
important that the freedom of transferring shares is not significantly restricted because foreign
investors might be deterred if it is too complicated to invest in companies in Albania. Article
120 says that the Statute may put conditions on the right of freedom but only if the
management organs or the shareholders agree. However, if the relevant organ or the
shareholders want to restrict this in any other way, it is perfectly possible to draft restrictions
as long as it is by consent between the company (via the relevant organ) and the shareholders.
The restrictions would normally be drafted and found in the Statute.

Article 121
Co-owned Shares
(1) Several persons may own one share. They shall exercise their shareholders’
rights through a joint representative.
(2) They are jointly and severally liable for the commitments linked to the share.
(3) Several members owning one share may agree that they own this share in equal
or different parts.
(4) Company’s actions in relation to the share will have effect as against all owners
even if it was addressed to only one of them.
(5) Co-ownership provisions of the Civil Code apply if co-owners do not reach an
agreement as per paragraph 3.

Article 122
Voting Rights
(1) Each ordinary share carries voting rights in proportion to its par value.
(2) Preferential shares may be issued without voting rights, in which case their par
value may not be greater than 49% of the company’s basic capital.
(3) Shares which, at the same par value, give multiple voting rights are prohibited.

Comments:

1. Article 122 (1) establishes the general rule that each ordinary share carries voting
rights in proportion to its par value. Preferential shares (Article 116) are usually issued as
non-voting shares. Article 122 (2) reasonably limits the issuing of such shares to 49% of the
company’s capital in order to eliminate the possibility that investors holding less than 51% of
the company’s capital control the company only for this reason. If the preference is cancelled,
the shares concerned shall be granted voting rights, Article 149 (4).

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