Page 75 - Albanian law on entrepreuners and companies - text with with commentary

 Release simple partnerships again from registration (and be in line with other legal
systems in the region and the EU) and amend the Business Registration Law in
this respect;
 Introduce a provision into the Civil Code or the new Company Law which
declares that simple partnerships which require an ordinary business organization
must transform and register as general partnerships. Here the threshold solution for
entrepreneurs could be added. As Civil Code amendments are more difficult to
achieve, amending the new Company Law would be the preferable solution. It
seems that this legal technical worry has not been a problem for Albanian
practitioners. In 2011 and 2012 several round tables were organized to review the
2008 Company Law. Although there were a number of meetings and they were
publicized very openly with a large number of participants no- one mentioned this
provision as a problem. It seems that it is not a significant issue.

2. The Company Law adopts a clear and simple model of partnerships emphasizing the
choice of the parties to design their own model in order to encourage economic activities in
Albania. The rules on Civil Code partnerships follow Italian concepts of simple partnerships
(la Società Semplice, Art. 2251 to 2290 Italian Civil Code) and provide often more complex
solutions. For example, the Company Law provides ‘default rules’—i.e. rules governing the
partnership if the partners have not agreed otherwise. An example is that profits and losses are
shared equally and voting is by simple majority. This is a device which allows considerable
flexibility. The Law sets the default rules but the partners can decide many of their own rules.
Articles 24, 26 (1), 36 (2), 37 (2) use this concept frequently. So, for example, the share in
profits and losses and the voting are detached from the contributions here. Article 1080 and
1086 Civil Code basically adopt another default rule meaning that profits and losses are
calculated in proportion to the amount contributed to the partnership and that also voting
inside the simple partnership be calculated in proportion to the amount contributed to the
partnership. However, Article 1076 Civil Code provides that “partners are presumed to
contribute the amount necessary to achieve the objective of the partnership on equal terms
unless otherwise provided by the contract.”
The biggest difference between the Civil Code provisions on partnership and the
Company Law provisions can probably be found in Article 1089 (1) Civil Code. Only the
partners who acted in the name of the simple partnership are liable to creditors unless the
contract establishes liability of all of them. In the general partnerships of the Company Law,
liability does not depend on who acted for the company. The creditor has the choice to claim
his rights either against the partnership or against (one of) the partners who are jointly and
severally liable with all their assets. Agreements to the contrary are ineffective as against third
parties, Articles 22, 40 (1).
As regards such agreements, Article 1089 (2) Civil Code is not in line with the effects of
registration of the simple partnership provided by Article 21 (2) Business Registration Law
and of the generalized third party protection rule expressed by Article 12 (2) to (4) which we

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