Page 22 - Albanian law on entrepreuners and companies - text with with commentary

1. We would like to start these Comments by explaining what Article 1 of the Company
Law does not provide: There is no introductory Article on definitions because such general
definition clauses in a company law act are either too simple and even tautological (e.g. ‘a
shareholder is a person holding shares in a joint stock company’), or too long and complex to
be defined outside of their context. Moving the definition from its context would make the
structure of the law more complex instead of simplifying it. Also, albeit cross-references are
required by many sections of the Company Law, they should be avoided where they are not
absolutely necessary. Therefore, the Company Law correctly provides definitions only where
the regulatory context requires them.

2. Article 1 (1) does not provide any general definition of the business organizations
which this Law addresses. It just mentions entrepreneurs and commercial companies without
clarifying why it makes sense to treat them in the same law. However, in order to distinguish
the entrepreneur from a natural person working, for example, as a banana vendor, or
distinguish general partnerships from simple partnerships, it makes sense to highlight the
background concept for entrepreneurs and companies. The distinction between the partnership
forms has gained importance because Articles 22 and 28 (2) of Business Registration Law
require registration of simple partnerships as regulated by the Civil Code. What unites
entrepreneurs and companies (including company law partnerships) is the fact that they all
pursue economic activities which require an ordinary business organisation.
Article 49, letter f) of the SAA defines ‘economic activities’ or ‘establishments’ or
companies or self-employed persons as ‘in principle activities of an industrial, commercial or
professional character and activities of craftsmen’. However, as the words ‘in principle’ show,
the list is open to any other kind of economic activities one can think of. In other words, the
SAA does not require the definition of entrepreneurs or companies to refer to any special
business type.
The legal definitions of entrepreneurs and companies of the Company Law do not
require that their economic activity should be profit making. By doing so, important economic
activities like the simple management of assets (e.g. buildings), the holding of participations
or any co-operation of entrepreneurs and companies, which is not profitable in and of itself,
but rather reduces costs for its members (e.g. joint research and development) come within the
scope of the Company Law without special company forms, such as, for example, ‘holdings’,
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being needed.

3. Article 1 (2) to (4) contain important duties or references. As regards registration
(paragraph 2), Articles 22 et seq. of the Business Registration Law now contain all the
registration requirements for initial registration. All the requirements for book-keeping and
financial statements can be found in accountancy laws, paragraph 3. Paragraph 4 refers to the
Commercial Court as the one that is usually in charge for company law matters.

38 Article 1074 (2) Civil Code requires that the partners of a simple partnership pursue an economic activity “with the
purpose of dividing the profits gained from it”; but this does not mean that the simple partnership would lose its purpose
and require dissolution when there are no profits to be divided.
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