Page 37 - Albanian law on entrepreuners and companies - text with with commentary

TITLE II
FORMATION

Comments:

1. The Business Registration Law and the Company Law have notably simplified the
formation procedures for companies. While the old Law No. 7632 “On the General Part of the
Commercial Code” required the involvement of a public notary and, therefore, a mandatory
step-by-step-formation (Articles 17 to 19), formation of the company is now carried out by
founders through one constitutional document, the Statute according to Article 6, and, within
15 days, Article 22 (2) Business Registration Law - its submission for registration to the NBC
together with the filled application form, Articles 27, 28 (3) Business Registration Law.
However, partners of partnerships and members of LLCs which may be represented by their
managers, may also register and become legal persons by filing the application form and
declaring that they comply with the legal provisions in force concerning the organization and
functioning of the type of company being registered. In this case, no written Statute (or
incorporation plus by-laws) would be required, Article 28 (4) Business Registration Law. One
remark is necessary here: many provisions of the Company Law are ‘default’ provisions, i.e.
partners, members or shareholders are allowed to change them through their Statute. So what
Article 28 (4) Business Registration Law is referring to, is the default provisions. In addition
to this general declaration, model statutes have been enacted and introduced by secondary
legislation. They will allow founders to choose among various Statutes and use these to define
their relation clearly instead of just referring to a general legal framework. This allows a great
flexibility for business persons because there are a huge number of situations which cannot be
catered for in business. The Company Law was drafted to make the law simple so therefore
cannot reflect all of the nuances of commercial life. Business persons can augment the
particular business reality by drafting the Statute carefully or alternatively use the ‘model
Articles’.
In this context Bachner, Schuster and Winner agree on the flexibility of the system of
default rules in the Company Law but misunderstand the subtlety of the Law. They realize
that if the Statute or particular provisions are changed by the members via the ability to use
the default provisions it binds all of the members and the company. However they
misunderstand the way that the flexible provisions are arranged. They appear to believe that
mandatory provisions should indicate that the provisions in the law are mandatory explicitly.
In fact the Law uses the opposite position. Only if there is flexibility in a particular provision
is this indicated. Bachner, Schuster and Winner use an example: Article 91 (2) provides that
members representing 5% of the votes or a smaller amount envisaged by the Statute may
request a special investigation. They rightly interpret this as allowing the members to increase
the percentage of the votes but not to decrease the number of the votes. However, they argue
that it is a mandatory provision and therefore a similar provision, Article 89, is also

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