Page 59 - Albanian law on entrepreuners and companies - text with with commentary

or the statute, the General Meeting or a minority of shareholders or creditors according to
Article 151 (2) may request the court to annul the approved transaction.
This provision was amended upon a request by the Regulatory Task Force that was
established by the Albanian Government. The amendment does not have any effects in
relation to Directive provisions, with which the 2014 amending Law is intended to be
approximated.
This provision was not included in the case of other types of companies, because, under
Article 13 of Law No. 9901, in their case any agreements are directly approved by their
members, which means that they become aware of their terms and conditions prior to their
approval.

6. Paragraph (6) requires full transparency for transactions where the conflicts of interest
regulated by Article 13 are involved: any transaction requiring approval as of paragraphs 2
and 3 shall be disclosed in the annual accounts. Such disclosure must include the terms of the
transaction and the nature and scope of the interests of the persons involved.

7. Article 13 (7) provides a special anti-self-dealing clause for single member companies:
an individual managing his single member company may not enter into contracts with the
company concerning loans and guarantees as it seems almost impossible for the manager to
avoid a conflict of interest and apply ordinary market value and financial safety standards (no
higher loan than necessary; adequate interest and amortization rates) to the loan or guarantee
relationship with the company. Any breach of this duty will make the representative liable in
accordance with Articles 98 or 163. Article 5 of the Twelfth Directive 89/667/EEC on single
member companies only requires that any self-dealing contract of the single member and
representative of the company shall be recorded in minutes or drawn up in writing. However,
Albanian law-makers decided to totally exclude loan and guarantee contracts due to their
imminent conflicts of interest. Only with respect to other self-dealing contracts, the second
sentence of Article 13 (7) requires recording by minutes and keeping them at the company’s
head office.
Article 5 of the Twelfth Directive does not establish any legal consequences of not
recording the contract. Lack of record should certainly not be treated as a condition for the
validity of the contract, last but not least with respect to third party protection. Also, one can
hardly imagine any causality between the lack of record and a creditor’s damage. A sanction
must, however, be provided with respect to the effet utile of the European provision. The third
sentence of Article 13 (7) resolves this problem by providing that, in case of non-compliance,
with the obligation to record the contract, the company will be liable to a fine.

TITLE IV
FIDUCIARY DUTIES

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