• Company Formation in Albania LLC


Company Formation in Albania LLC

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Limited liability company (“SHPK”). ALBANIAN LLC
The SHPK is a commercial company whose shareholders’ liability is limited to the unpaid portion of their shares1. A SHPK (LLC) is liable to its creditors only to the extent of its own assets.
This form of enterprise is convenient for small and medium-sized business activities because of the advantages it offers over the other types of business associations:
• The minimum capital required is relatively low – 1Euro
Shareholders’ personal assets are protected from business debt because their liability is limited to the amount of their contribution into the capital. By contrast, unlimited partnership partners are liable to creditors with their entire property
• The SHPK avoids the higher publicity requirements and the complex incorporation procedures applicable to a SHA company.
Because of these advantages, the vast majority of foreign-owned companies operate in this legal form.

Set up company LLC in Albania. (ALBANIAN LLC)

A SHPK can be formed by one or
more persons. The Albanian Law on Entrepreneurs and Commercial Companies does not provide for a minimum or maximum number of shareholders in a SHPK. It should be taken into account that a large number of shareholders will make the company’s management cumbersome, since all important decisions must be taken by a majority of shareholders representing 75% of the LLC’s capital.

The specific formation rules applicable to the LLC are:
• The founders must appoint administrator(s) for the company. The administrator does not necessarily have to be a SHPK shareholder, Albanian citizen or resident
• The Articles of Incorporation and Articles of Association must be drawn
up and filed with the Commercial Register.

Capital in Albania
The statutory minimum capital of a ALBANIAN LLC is 1 Euro. The capital of the company is divided into quotas and the size of each shareholder’s quota determines their rights and obligations concerning the company. It is possible for the quotas of the individual shareholders to be of unequal value. The quotas of shareholders in a SHPK are not securities.
One of the main characteristics of the ALBANIAN LLC is related to the transfer of shareholders’ quota. The transfer of quota from one shareholder to another is unrestricted but the transfer to a third party might be subject to other shareholders’ consent or pre-emption right only if the company’s Articles of Association provide for such restrictions.

The ALBANIAN LLC is managed by the General Meeting of Shareholders (the sole owner in the case of a sole partner SHPK) and by the appointed administrator(s).
Each LLC must hold at least one General Meeting of Shareholders each calendar year (Annual General Meeting). It is usually convened at the administrator’s discretion, but it can also be convened upon the written request of shareholders whose quotas amount to at least 5% of the company’s capital.

Apart from the Annual General Meeting, the administrator may convene additional meetings commonly referred to as Extraordinary General Meetings. An Extraordinary General Meeting must be called immediately when, according to the annual financial statements or interim financial reports, the company’s assets cannot cover the due obligations within the following 3 months, or if the company intends to sell or otherwise dispose of assets with a value higher than 5% of the company’s assets as per the last annual financial statements. There is no limit to the number of General Meetings a company may hold each year.
The General Meeting is the company’s highest management body. It is empowered to make key strategic and executive decisions regarding the company. The shareholders are authorized to decide on the admission and expulsion of shareholders, the appointment of administrator(s), a capital increase or reduction, approval of the annual report and balance sheet, the distribution of profits and others.
The day-to-day management of a LLC is conducted by at least one administrator.

The administrator represents the LLC
in court and in dealings with third parties. They are financially liable for damages caused to the company. For example, in the case of over-indebtedness or insolvency, the administrator must file an application initiating insolvency proceedings. If the administrator does not perform their duty, they may be held liable for damages to both the company and its creditors.

03 February

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