Page 45 - Albanian law on entrepreuners and companies - text with with commentary

(6) A branch shall act under the registered or trade name of the company
concerned and its own name.

Comments:

1. The Business Registration Law provides rules on registration of branches (and
representations) following the Eleventh Directive 89/666/EEC on Branch Registration. Article
9 provides definitions of the terms ‘branch’ and ‘representations’ (or ‘agencies’). The branch
definition of Article 9 is actually based on Article 49 SAA. Branches and representations are
herewith clearly distinguished from ‘subsidiaries’ which are legally independent companies
controlled by a ‘parent company’ in accordance with Article 207 et seq.

2. The Business Registration Law mentions only branches of foreign companies. Branches
of Albanian companies are not considered because they are not legally independent in any
case and the company data are registered with the NBC anyway. Last but not least the NBC is
supposed to operate through its service windows everywhere in the country meaning that that
data is accessable nationwide (Article 5 Business Registration Law).
It is interesting to note that no branch provision (for foreign business-persons) refers to
branches opened by an entrepreneur. There is no reason why a (foreign) entrepreneur should
not spread his business organizations throughout the country. As Comments to Article 2
shows, such entrepreneurs can play an imporant role on the market. There is no mandatory
provision to transform into a company starting from a certain business volume. So the
possibility for (foreign) branches created by entrepreneurs should be taken into account. We
recommend in this respect to apply the NBC registration rules listed by Article 9 (5)
accordingly requiring from a foreign entrepreneur all those data with exception to those which
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are specificly designed for companies.

3. Registration of the branches of foreign companies is an important aspect of a country’s
business environment, especially with respect to the jurisprudence of the ECJ mentioned in
the Comments to the previous Article. As the branch, which has no legal personality, is
subjected to the law of the company headquarters, creation of branches by foreign
companies means an import of foreign company law. This is above all important for
creditors, because they cannot address their claims against a company founded according to
domestic company law, as would be the case of a subsidiary, they must address their claims
against a foreign company. However, it should be noted that this only applies to the filing of
the claim, the law governing the transaction will be the law determined by the relevant court
to be ‘the proper law of the contract’. Thus, if an English court were to hear a claim between

74 See, with respect to EU Members State entrepreneurs and companies, also the SAA Chapter on ‘Establishment’,
Articles 49 to 56. Article 49, letter ‘d’ SAA establishes that “Establishment” shall mean:
“(i) as regards nationals, the right to take up economic activities as self-employed persons, and to set up undertakings, in
particular companies, which they effectively control….
(ii) as regards Community or Albanian companies, the right to take up economic activities by means of the setting up of
subsidiaries and branches in Albania or in the Community respectively.”
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