Director conflicts of interest in Albania often arise in ordinary business decisions: leasing premises from a manager, buying equipment from a relative’s business or engaging a service provider connected to a board member. A commercial benefit to the company does not eliminate the need to identify and manage the interest. Equally, a personal connection does not by itself prove fraud or make every transaction automatically invalid.
The practical question is whether the company has followed the correct process before committing itself. This guide focuses on commercial companies under Albanian company law. It separates disclosure, authorisation, voting, signing and later reporting, because completing one step does not necessarily complete the others. Regulated entities and public-sector arrangements can require additional checks.
1. Start with Article 13, not a generic approval form
Article 13 of Law no. 9901/2008 on Entrepreneurs and Commercial Companies, as amended, addresses conflicts and connected persons. For the transactions it covers, disclosure must identify the terms and the nature and subject of the person’s interest, and the required authorisation is prior authorisation. A statement that the price is fair is not a substitute for this process.
The rule is not limited to a contract directly between a director and the company. Article 13(3) also addresses transactions with third parties whose personal or financial relationship with the relevant representative or supervisor may reasonably influence decision-making against the company’s interests. The statutory connected-person presumptions should therefore be checked, rather than relying only on the name appearing on the supplier’s invoice.
Begin with a factual relationship map: who owns or controls the counterparty, who negotiated the terms, who will benefit and who can influence the company’s decision. Record facts and supporting documents. Do not turn a suspicion into a public allegation; if ownership or a relationship is uncertain, identify the missing evidence and obtain it before reaching a legal conclusion.
2. Identify the company form and the authorising body
For a Sh.p.k., Article 13(2)(b) refers to authorisation by all members or all other members, depending on the situation contemplated by the provision. It should not be reduced to an ordinary majority approval without examining the parties and interests involved. A manager’s commercial mandate or the fact that a payment is within budget does not answer this question.
For a Sh.a., Article 13 identifies the board of directors or supervisory board for the relevant categories of administrators and board members. Check the governance system, appointments and articles before preparing the decision. A document labelled ‘shareholder approval’ or ‘board consent’ is not sufficient if it was adopted by the wrong body or without the required participation.
Prepare a transaction-specific checklist. Identify the legal basis, the relevant corporate body, the persons whose interests are involved and any additional requirements in the articles or a financing agreement. A group company’s internal policy can add useful controls, but should not be used to bypass the Albanian company’s mandatory approval process.
3. Separate disclosure from voting and quorum
Under Article 13(4), persons seeking approval for a transaction under paragraphs 2 and 3 cannot participate in the approval vote and are not counted in the quorum. This matters before the meeting starts: the person organising it must assess whether the remaining participants can validly decide. Simply recording an abstention after counting everyone present may fail to address the underlying problem.
The decision file should show the declared interest, the documents considered and how the exclusion was handled. Where the remaining decision-making process is uncertain, obtain legal assessment before signing. Do not invent a solution by appointing an informal proxy or describing a conflicted vote as advisory. The legal effect depends on the specific form and process.
4. Test the commercial terms with evidence
Conflict management should allow the competent body to make an informed decision. As a practical safeguard, compare price, quality, delivery, guarantees and alternatives. Explain why the proposed counterparty is selected, especially if there is no tender or only one available supplier. A low headline price can conceal unfavourable termination terms, advance payments or dependence on one provider.
These comparisons are recommended evidential safeguards, not a statement that every private-company transaction requires the same tender procedure. The file should be proportionate to the transaction. For a material asset purchase, an independent valuation may be appropriate; for a routine service, comparable quotations and a reasoned assessment may be more useful. An external opinion supports the decision but does not replace authorisation.
5. Approval is not the same as signing authority
After approval, check who may sign for the company and the counterparty. Review the current register, appointments, articles and any applicable power of attorney. Representation under Article 12 and conflict authorisation under Article 13 raise distinct questions. An authorised signatory may still be subject to conflict controls; a valid internal decision may still need implementation by the proper representative.
Match the final contract to the approved terms. If the price, scope or counterparty changes materially during negotiations, refer the change back for assessment rather than assuming that the earlier approval covers it. Keep the final signed version with the decision and supporting materials, so that a later reviewer can see what was actually authorised.
6. Check registration, notification and reporting separately
Article 13 contains further requirements beyond the meeting. Its text addresses notification for registration of prior general approval, notification of relevant Sh.a. board approval to the general meeting without delay and within 72 hours, and additional website publication for the public-offer company category. It also addresses disclosure of covered transactions in financial statements and business-performance reports. The precise duty must be matched to the transaction and company type.
Do not apply the Sh.a. notification rule as a universal deadline for every Sh.p.k. arrangement, or assume that preparing minutes completes all filings. The company should allocate an owner to each applicable obligation and retain evidence of completion. References in the company-law text to older institutional or securities legislation should be read alongside the current registration and sector-specific framework, not copied mechanically into a filing instruction.
7. A special warning for the sole-member administrator
Article 13(7) specifically addresses a person who is simultaneously administrator and sole member or shareholder. It prohibits that person from entering loan or guarantee contracts with the company and requires other contracts between the person and company to be recorded in minutes kept at its registered office. The condition matters: this should not be rewritten as a blanket statement that all shareholder loans are prohibited.
A proposed payment, financing arrangement or guarantee involving that combination of roles needs assessment before documents are signed or funds move. A signature described as a shareholder decision is not a reason to ignore the restriction. This guide does not propose a workaround; the lawful alternatives depend on the purpose, roles, financing structure and other applicable rules.
Two hypothetical transactions
Example one: a Sh.p.k. proposes to buy a vehicle from a business connected to its administrator. The first task is to establish the relationship and Article 13’s application. The file should then identify the required prior authorisation, voting exclusions and commercial evidence. A comparison showing a competitive price is useful, but does not by itself authorise the purchase. After approval, the contract and signing arrangements still require verification.
Example two: a Sh.a. board member is connected to a proposed property lessor. The company needs to assess the relationship, the competent board process, quorum and relevant disclosure obligations before commitment. If the interest is discovered only after signature, the answer is not to backdate an approval. Preserve the record, establish what occurred and seek advice on consequences and available remedial steps without assuming automatic validity or invalidity.
What to prepare for a legal review
Provide the articles, current extract, appointments, relationship information, draft contract, commercial comparisons and any existing approvals. Explain whether the agreement is proposed, signed or already being performed. Identify payments, open deadlines and who knew about the interest. These facts help distinguish prevention from the handling of a completed transaction.
Alba Legal can assist with the legal analysis and the approval documentation. A useful outcome is a clear allocation of the next steps, not merely a conflict declaration placed on file. General information reviewed on 18 October 2026; individual transactions, regulated businesses and disputed approvals require specific assessment.
