Page 94 - Albanian law on entrepreuners and companies - text with with commentary

The most important change is the extent to which the new LLC may be designed by its
participants to fit their particular circumstances. Mandatory requirements and safeguards are
kept to a minimum. The minimum mandatory requirements are the following:

 the protection of third parties from being disadvantaged from any internal
company rules. This is a principle applies to all company forms. See Article 12,
and respective Comments;
 registration with the NBC. See Article 69;
 obligation for members to make agreed contributions. See Articles 68 (1), 102 (1);
 protection of members and creditors by preventing distributions unless the
directors certify that the company is solvent. See Articles 77 to 79;
 protection of members by rules governing members’ meetings. See Articles 81 to
90;
 rules governing minority shareholder protection. See Articles 91 to 93;
 rules governing the fiduciary duties of managers. See Article 98;
 protection of members and creditors against fraudulent undercapitalization and
other forms of abuse of the company’s legal form, Article 16. See respective
Comments;
 rules governing dissolution. See Articles 99 to 104;
 rules governing liquidation. These rules basically apply to all company forms. See
Articles 190 to 205.

2. These mandatory provisions leave a wide area of discretion for the members who may
design the company to fit their particular business. Under following circumstances the law
provides default provisions which may be excluded by agreements between members and
embodied in the statute:

 any capital amount above 100 Lekë. See Article 70;
 conditions for the transfer of shares. See Article 73 (3);
 the distribution of profits. See Article 76;
 withdrawal of shares. See Article 80.
 the distribution of voting rights. See Article 88.

3. The risk posed by this model is that it opens up limited liability to a wider public and
removes restrictions such as traditional capital protection rules. However, experience in a
number of EU Members States has shown that these rules are almost impossible to enforce
and that flexibility of design encourages a vibrant small and medium enterprise (SME) sector
while providing little evidence of an increase of fraud (see below comments to Article 70). In
order to protect LLC creditors, the focus on capital raising and maintenance is replaced by the
focus on liability of company managers. Also, creditors may want to protect themselves by
negotiating special agreements (charges) with the LLC. The Company Law therefore is
drafted in a simple way, allowing great flexibility for business people to design own their

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