The New Legal Regime on Minority Shareholder Protection in Albania

Jonida Rustemaj

doi:10.12955/snsj.v5i0.306

Abstract

This article aims at introducing the main changes brought by the new Albanian Company Law on minority shareholders’ protection. Due to the harmonization of our legislation with the acqui, new pieces of laws were introduced in commercial law. In 2008 the new law “On entrepreneurs and commercial companies” was enacted. The latter introduced new practices and concepts, some of them not familiar to the Albanian legal system. I was motivated to write a paper on minority shareholders protection in order to emphasize the new regime and instruments of protection granted by the new laws. A matter which concerns investors and especially foreign ones is the protection of minority shareholders. This paper discusses the instruments of protection of minority shareholders bringing the novelties of the newly introduced laws because of the unclear regime under the repealed law using the analytical and comparative method. Few rights which were known by the former Albanian company law were usually compromised, but under the law in force, minorities are much more protected.Does the new law strengthen the position of such category of shareholders? What are the rights of minority shareholders conferred by the law? These and other questions will be addressed herein.

Highlights

It is noteworthy to emphasize that in our country there is no tradition of Corporate Governance, due to the lack of any formalized Corporate Governance Code and due to the fact that the first law on companies was only approved in 1992 and our country had no experience on the management of Joint Stock Companies, because enterprises were held by state
Principles of Corporate Governance have been incorporated in provisions of the Albanian Company Law
This level of protection is important because as pointed out in La Porta et al (1993: 35); La Porta et al (1997); La Porta: (1998) a countrys legal mechanisms for the protection of minority shareholders have been seen by some Western economists as an important indicator of the success of these markets in attracting capital, such that countries with poor investor protections have significantly smaller debt and equity markets (Tomasic, 2007)

Summary

Introduction

It is noteworthy to emphasize that in our country there is no tradition of Corporate Governance, due to the lack of any formalized Corporate Governance Code and due to the fact that the first law on companies was only approved in 1992 and our country had no experience on the management of Joint Stock Companies, because enterprises were held by state. No protection was guaranteed to minorities based on the fact that there was no obligation on Board members to treat all shareholders in the company, regardless the numbers of shares owned by them.

Objectives

Results

Conclusion