Page 145 - Albanian law on entrepreuners and companies - text with with commentary

2. Shares granting multiple voting rights are prohibited, Article 122 (3). This is a
consequence of the ‘one share-one vote’ rule of paragraph 1. Another unwritten consequence
is that also maximum limits of votes may not be set. We will come back to this when
commenting on State-Owned Companies, Article 213, as such limitation was often used in the
past for companies of public interest with state participation where either the dominance of
the state or of a major outside investor was supposed to be limited by allowing only a
maximum number of votes to be cast, even if the share quota in the company was higher.
Such formula would now be illegal with respect to the rule of Article 122 (1).

TITLE III
LEGAL RELATIONSHIPS BETWEEN THE COMPANY AND THE
SHAREHOLDERS

Comments:

Preservation of the Companies’ Capital. This Title (Articles 123 to 133) basically
covers capital maintenance provisions after the company has come into existence, while Title
I focuses in particular on capital raising requirements for founders. There are obviously many
interconnections as, for example, new shareholders must bring their contributions in line with
the rules established by Articles 112 and 113, Article 123. On the other hand, the procedure
for untimely payment of Article 124 applies not only to new shareholders but also to founders,
Article 113 (3). A shareholder may lose its membership in this case as its unpaid share will be
withdrawn, Articles 124 (3), 186.
During the lifetime of a company, the value of the company’s assets will necessarily
vary according to the company's economic development. It cannot be excluded that the value
of the assets may be reduced so as to be no longer sufficient to cover the company’s capital.
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Since shareholders are usually not personally liable towards the company’s creditors,
preservation of the company’s capital becomes an essential concern—at least in the eyes of
the capital guarantee concept which the Second Directive envisages for JSCs. In this respect
the Company Law applies legal concepts that are in line with the Second Directive.
First, the Law normally prohibits any return of investments to the shareholders, Article
126.
Second, only profits declared in the annual accounts of the company may be distributed
out of the company’s assets to the shareholders, Article 128.
Third, such dividends may however only be defined after at least 5% of the annual
profits have been set aside as mandatory reserve until 10% of the basic capital or a higher
ratio established by the statute have been reached, Article 127 (1) and (3).
Fourth, prohibited payments must be refunded to the company, Article 129.

140 Except in those extreme cases to which the ‘piercing-the-veil’ concept applies. See Comments to Article 16.
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