Page 52 - Albanian law on entrepreuners and companies - text with with commentary

knowledge of the irregularity or could, in view of evident circumstances, not have been
unaware of it.

Comments:

1. New paragraphs (1) and (2) of Article 12 first provide the company may not change
competencies provided for in the Company Law with respect to each company organ. If such
change is made in the statute or in other company decisions, than it may not relied by the
company as against third parties, irrespective if the change has been published or not
according to the Business Registration Law. The founders’ freedom to design competencies of
the organs of their company is therefore limited only to those cases that are specially allowed
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by the Company Law.
Second, the company can now only limit the power of the legal representatives of the
company to act solely for certain or all company relations with third parties, but may not
transfer representation powers for certain actions to other company organs (i.e. the provision
of the statute or other company decision transferring the representation powers form the
administrator to e.g. the sole shareholder, shall be contrary to this provision). Any additional
limitation to the powers of legal representative would constitute a change of competencies
under paragraph 1, and therefore may not be relied as against third parties, even if the
limitation has been published according to the Business Registration Law. The administrators
owe to the company compliance with any restrictions of their powers of representation, even
if exceeding the above. Therefore, if the statute or a company decision limits the power of the
administrator to enter into transactions based on the type or value, and such transaction is
effectively entered into by the administrator, than the company shall be obliged to fulfil such
commitment, but the administrator could face claims of breach of fiduciary duties.
Permitted limitations to the power of the administrator to act solely for certain or all
company relations with third parties, must by disclosed pursuant to the Business Registration
Law. If such disclosure is not made, than the company may rely such limitation as against
third parties, only if it proves that the third party knew of the limitation, or could, in view of
evident circumstances, not have been unaware of it.

2. Paragraphs (2) and (3) of Article 12 follow the generalized third party protection
approach and implement Article 9 of the First Directive: if a legal representative exceeds his
powers of representation or the company objects, this ‘ultra vires’ behaviour will not affect
the relationship with third parties and the company will remain bound to any contract entered
into by a representative exceeding his powers unless it proves that the third party knew that
the act was outside the authorization or objects or could, in view of evident circumstances,
not have been unaware of it.

84 For example, under Article 134 of the Company Law, in two-tier system joint stock companies, the General Assembly
may directly appoint the company director, if the statue so allows.
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