November 01 2010
The Company Law, which has recently been reformed to harmonise Albanian law with EU law and the commercial legislation of other EU member states, now offers joint stock companies the choice to opt for either the one-tier or the two-tier administrative system.
The board of administration is the central administrative organ of a joint stock company. It typically combines management and supervisory functions, although the administrators are not necessarily members of the board. The board is composed of between three and 21 members, all of whom are natural persons and most of whom should be independent (ie, free from conflicts of interest as determined by the law) and uninvolved in the administration of the company.
Board members are appointed and removed by the general assembly of shareholders. They may be elected from among the company's shareholders and employees, as well as from among other individuals outside the company. The board has the authority to appoint and remove the administrator and define his or her powers.
An individual's eligibility to become a member of the board of administration of a company is restricted if that individual is already:
Further, membership of the board of administration or supervisory board of more than one company in a group shall be considered as membership of only one board.
If more than one administrator is appointed, they shall manage the company jointly, unless the company bylaws provide otherwise.
In the two-tier system, the administrator administrates the joint stock company and decides on the implementation of commercial policies, while the supervisory board supervises such implementation and its compliance with the law and bylaws of the company.
In relation to the two-tier system, the Company Law refers back to the articles dealing with the powers of the board of administration in the one-tier system. Thus, the supervisory board and the administrator have the supervisory and administration powers, respectively, pertaining to the board of administration and the administrator in the one-tier system.
The administrator may be appointed and removed by the general assembly or the supervisory board, subject to the company bylaws, while members of the supervisory board are appointed and removed by the general assembly. The company bylaws may specify that some members may be elected and/or removed by the company's employees.
Members of the supervisory board are non-managing and the majority must be independent (ie, free from conflicts of interest as determined by the law). The company bylaws may specify that some of the members may be elected and/or removed by employees of the joint stock company.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.