Page 50 - Albanian law on entrepreuners and companies - text with with commentary

3. Since the text of the First Directive is disputed, national governments need to decide a
path that is sensible for the country. The 2014 amendments of the Company Law are intended
to be best for Albania. For many reasons the EU wanted to limited concepts like ultra vires,
nullity and notarization because they are a block on investment because investors do not like
the risk entailed by finding out all of the details of company documentation. Modern company
laws in the EU have constantly limited these concepts and rather have turned to maximizing
third party protection. The amendments of Article 12 have followed that modern path making
third party protection stronger.

4. Once the EU faced significant expansion there were two available choices: one was to
place the burden of risk on the third party who completed a transaction with a company where
the company was acting outside its objects or where the representative had not been properly
appointed. The alternative was to create a system which largely relieved the third party from
enquiry as to whether such internal formalities had been complied with, thus placing the
burden that an unauthorised contract had been concluded on the company. The provisions of
the First Directive went almost completely to the latter system because it was recognized that
the more countries that were trading together the less possible it would be to ensure that the
internal formalities of company procedure had been complied with. As things have developed,
more countries have moved towards the latter system, moving away from requirements that
the third party ensure that the person with whom they deal has actual authority to conclude the
contract. This encourages confidence in dealings between foreigners and local companies and
may encourage a move away from excessive red tape which causes business to be
significantly slowed down. The danger with adopting this system is that fraudulent
representations can be made by persons unconnected with a company that they have standing
to bind the company. This can be guarded against by a provision which creates liability for a
company only where the third party has reasonable grounds to believe that he is dealing with
a bona fide representative of the company, this will normally be when the company has done
something which leads the third party to understand that this is the case.

5. As regards registration and publication of company data, the third party protection
concept was adopted for the first time by Article 21 Business Registration Law which
complies with Article 3 of the First Directive (as amended by Directive 2003/58/EC).
However, as we will see in Comments to Article 12, the generalized third party protection
goes even further as it refers to Articles 8 and 9 of the First Directive.
In 2014 an amendment intended to further strengthen third party protection and
clarifying the Company Law was enacted with Law 129/2014. The amendments are intended
to:

 align the Company law with Directive 2009/101/EC;
 further clarify the competencies of Company organs and legal representation;
 further approximate the provisions of Article 12 of Law No. 9901 with Directive
2009/101/EC in terms of allocation of powers among company governing bodies,

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