Page 155 - Albanian law on entrepreuners and companies - text with with commentary

1. As regard JSCs, the Company entirely does away with any ‘hierarchical’ company
constitution and introduces a flexible ‘balance of power’ between the company organs, i.e.
between the General Meeting, the Board of Directors or Supervisory Board and Managing
Directors. The General Meeting may gain strength if ‘the Italian variant’ of the two-tier
system is chosen (see previous Comments). However, cooperation with the (Managing)
Directors remains dominant. The company’s power structure will in any case depend on the
distribution of shares and on the persons which represent them. We will come back to this
when discussing provisions on the Law of Groups, Articles 205 et seq.

2. Also in JSCs the General Meeting “sets the business policies”, Article 135 (2) a), After
the business policy is set by the Meeting, the Board of Directors gives concrete instructions to
the Managing Directors to implement these policies throughout the year, Article 154 (1) a),
and the Managing Directors will carry out the company’s business, Article 158 (3) a).
Cooperation and information are also required by Article 135 (3) which requires the General
Meeting to take the opinion of the Board of Directors into careful consideration as regards
approval of financial statements and distribution of profits. In this respect Article 154 (1) c)
establishes requirements for the Board in (preparation by the Board of Directors of measures
to be taken by the General Meeting), Article 154 (1) e) (Board must monitor, approve and
report on financial statements produced by Managing Directors and present them to the
General Meeting), Article 154 (1) ë) (Board must approve and report to the General Meeting
on auditors’ reports). Article 154 (2) requires the Board to convene the Meeting if decisions
according to Article 136 (3) – (5) must be taken These provisions require the involvement of
the General Meeting in important decisions regarding the company’s financial situation and its
future operation. In these circumstances, the General Meeting may pass an advisory resolution
approving or condemning the conduct of the management, Article 136 (8).

3. This direct involvement of the General Meeting in management decisions in the cases of
Article 136 (3) to (5) is an exception to the rule that the General Meeting is not involved in
the company’s everyday business. The general policy will be set during the ordinary meetings
which normally take place only once a year, Article 136 (1).
However, this is a default model as the Law allows the role of the Meeting to be
stronger if company founders or shareholders so wish. While the last sentence of Article 158
(4) declares that competencies of the Board of Directors may not be delegated to the
Managing Directors, there is no such clause with respect to the relation between the Board,
Managing Directors and the General Meeting. The Statute can provide for a different
distribution of competencies as long as the Law allows this, Article 135 (2) j), Above all,
when opting for the ‘Italian variant’ of the two-tier system (managers and supervisors to be
elected by the General Meeting) founders or shareholders may want to take advantage of this
possibility and increase also direct involvement into management. Another case where the
Law explicitly allows the Statute to enlarge the competence of a company organ can only be

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