Page 202 - Albanian law on entrepreuners and companies - text with with commentary

the company, does not exclude the necessity for legal safeguards against the administration’s
use of the company’s assets in favour of one specific investor or third party. The coincidence
of shareholders’, creditors’, employees’ and ‘public’ interests in the economic success of the
individual company may be destroyed, if the company is integrated into a larger group of
companies which may no longer pursue the interest of the individual company, but rather the
economic and ‘institutional’ success of the whole group, potentially at the expense of an
individual company belonging to the group.
On the other hand, the existence of groups of companies shows that ‘the market’ itself is
pushing economic actors to strengthen their competitive role and use the instrument of
‘grouping’ to do so. Affiliated corporate entities owe their strength to their structure as a
group and their wide range of interconnected relationships. These groups apply a system of
decision making permitting coherent policies and a common strategy through one or more
decision-making centres. 170 In transnational corporations or ‘multinational enterprises’
(MNEs), this decision-making structure has the ‘world’ as its focus. 171 Such entities may
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become very powerful social ‘institutions’, more powerful than many nation-states, and
lead to a restriction or even exclusion of competition. In this sense, groups are an example of
the ‘imperfection’ or ‘paradoxes’ of the idea of the market. In a society which accepts the
structures of market economy, it would, therefore, be useless to try to abolish them as they are
an intrinsic part of the system.
However, there is obviously the necessity to cope with the undesired political, social
and economic effects, or ‘externalities’, which such groups produce and to subject them to
adequate national and international regulatory frameworks. While human rights, labour and
environmental law may become instruments to cope with the political and social problems of
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such entities, anti-trust regulation including merger control and measures against
restrictions of competition and unfair competition try to protect the market functions from
‘monopolizing tendencies’ inherent in groups of companies. Company law is supposed to
confront another set of legal problems which may be summed up as follows:

 the fraudulent or immoral use of the corporate veil to shift resources between
companies in order to defeat outside interests;
 group decision-making, including the capacity for oppression of minority interests;
 above all for tax and accounting legislation: the difficulties of definition of a single
economic unit in an ever changing group environment.

170 UN Commission of Transnational Corporations or ‘Group of Eminent Persons’, The Impact of Multinational
Corporations on Development and on International Relations (UN pub E74 IIA 5), 25; as quoted by J. Dine, M Blecher
and M. Koutsias, footnote 12, p. 42.
171 J. Dine, ibid. and see J. Dine “Jurisdictional Arbitrage by Multinational Companies: a national law solution”, Journal
of Human Rights and the Environment, Vol. 3, No. March 2012, pp. 44-69
172 For example, the combined revenues of just General Motors and Ford exceed the combined ‘gross domestic product’
(GDP) for all of sub-Saharan Africa, and fifty-one of the largest one hundred economies are corporations. The number of
transnational corporations jumped up from 7,000 in 1970 to 40,000 in 1995. These corporations and their more or less
250,000 foreign affiliates account for most of the world’s industrial capacity, technological knowledge and international
financial transactions.
173 See J. Dine, Company Law, International Trade and Human Rights (Cambridge University Press, 2005), p. 151–175.
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