Page 189 - Albanian law on entrepreuners and companies - text with with commentary

the rights of their holders to a shareholders’ profit share (profit sharing bonds), may
only be issued by decision of the General Meeting.
(2) The General Meeting may authorize the Board of Directors, in the one-tier
system, or the Managing Directors, in the two-tier system, to issue shares referred to in
paragraph 1 for a period not exceeding five years. The relevant organ shall report the
decision referred to in paragraph 1 to the National Registration Centre for registration
and publication.
(3) Profit sharing bonds may award priority in profit sharing in the same way as
preferential shares as of paragraph 1 of Article 116.
(4) With respect to the issue of convertible and profit sharing bonds, shareholders
have a pre-emption right corresponding to shareholders' pre-emption right during the
issue of new shares.

Comments:

Article 29 (6) Second Directive extends the pre-emption right on convertibles.
Consequently this right may also be limited or excluded in accordance with Article 29 (4)
Second Directive. With respect to the pre-emption right of convertibles, Article 180 (4) of the
new Law refers back to Article 174: that means that this right may be excluded for
convertibles, too, and with the same majority requirements which are those of Article 145.
(See Comments above to Article 174.)

TITLE VI
REDUCTION OF CAPITAL

Comments:

1. A reduction of the company’s capital (Articles 181 - 186) which may lead to a return of
investments to shareholders is subject to safeguards in favour of the company’s creditors who
are entitled to collect their claims or to ask for securities before the reduction of the
company’s capital may become effective, Article 183. Capital reduction is usually carried out
to compensate losses, to increase legal reserves or to reorganize the company. It requires a
decision of three-quarters of the General Meeting as well as the increase of capital, Article
145.

2. Capital reduction for reorganization usually combines a reduction with an increase of
capital. The reason for this is to adapt the statutory capital to the real capital status of the
company. This is to avoid the situation that capital losses need to be compensated over many
years preventing the company from paying any dividends, a situation which is not attractive
for new investors. The reduction of capital has the effect that only the current shareholders
are bearing the losses. The simultaneous increase of capital by emission of new shares brings

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