Page 182 - Albanian law on entrepreuners and companies - text with with commentary

established by paragraphs 3 to 5 of Article 158, the Managing Director is responsible for
the functions listed in letters a), gj), h) and i) of paragraph 1 of Article 154. Approval by
the Supervisory Board of decisions of the Managing Director in other cases than the one
mentioned in Article 13 and in letter e) of paragraph 1 of Article 154 can only be
required if established by the Statute.
(3) Neither Managing Directors of the company and of companies in the same
group nor persons related to the above persons in accordance with paragraph 3 of
Article 13 may be elected as members of the Supervisory Board.
(4) Article 155 and 157 apply to the number, election, composition and dismissal of
the Supervisory Board members with the exception
a) that members shall be non-managing and the majority of them independent;
b) that the Statute may provide that some of the members may be elected and/or
dismissed by employees.
(5) Article 160, 161, 162 on remuneration, internal structure and decision-making
apply accordingly to the Supervisory Board.
(6) Supervisory Board members are liable for damage caused by violation of their
duties and the standard of diligence expressed by paragraphs 1 to 3 of Article 163. As
regards violations by Managing Directors with respect to paragraph 4 of Article 163,
Supervisory Board members are liable if they were aware or could have been aware of a
violation of duties without notifying the General Meeting in this respect.

TITLE V
INCREASE OF CAPITAL

Comments:

1. As far as an increase of the company’s capital is concerned, creditors’ as well as
shareholders’ interests require protection. As well as being an adequate instrument for
reorganization, capital increase is mainly an instrument to finance the company’s expansion.
This is, for example, an important instrument if acquisition of financial capital from outside
sources is too expensive because interest rates are very high.

2. In such a situation, creditors are appropriately protected by applying the rules relating to
the raising of the company’s capital during the formation of the company accordingly, Article
168 (4). Shareholders are protected by a right of pre-emption for new shares, Article 174, or,
in case of an increase of capital out of company reserves, by the right to receive new shares,
Article 179. Often the increase is carried out with the help of banks which subscribe the new
shares on condition that the shareholders will buy the shares honouring their pre-emption
right. The easy way to increase the company’s capital is to issue new shares. The money will
be funded either by new investors or from the company’s reserves, allowing current
shareholders to have a larger stake in the company. It could be possible to increase the

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