The Albanian legal framework provides clear procedures for the liquidation, restructuring, and cancellation of commercial companies. These processes are governed primarily by the Albanian Commercial Companies Law No. 9901 (2008), as amended, and other relevant legislation, including the Bankruptcy Law No. 8901 (2008) and the Law on Tax Procedures No. 9920 (2008).
Understanding these procedures is crucial for business owners, creditors, and stakeholders to ensure compliance and protect their rights. This article outlines the key legal aspects of company liquidation, restructuring, and cancellation in Albania.
1. Liquidation of Commercial Companies
1.1 Voluntary Liquidation
Voluntary liquidation occurs when shareholders decide to dissolve the company. The process involves:
1. Shareholders’ Resolution – A decision by the general meeting of shareholders, requiring a qualified majority (usually 3/4 of votes).
2. Appointment of Liquidators – The shareholders appoint one or more liquidators (who may be directors or external professionals).
3. Notification to the National Business Center (NBR) – The company must file the liquidation decision with the NBR within 15 days.
4. Creditors’ Notification – The liquidator must publish a notice in the Official Gazette and notify known creditors.
5. Asset Liquidation & Debt Settlement – The liquidator collects company assets, settles debts, and distributes remaining assets to shareholders.
6. Final Report & Deletion from NBR Register – After settling obligations, the liquidator submits a final report, and the company is struck off the registry.
1.2 Compulsory Liquidation
Compulsory liquidation may be initiated by creditors or authorities due to insolvency or legal violations. The process includes:
– Court Petition – Filed by creditors or the tax authorities if the company is insolvent.
– Judicial Supervision – The court appoints a liquidator and oversees the process.
– Asset Distribution – Similar to voluntary liquidation, but under court supervision.
2. Restructuring of Companies
Restructuring may involve mergers, divisions, or transformations to improve financial stability. Key procedures include:
2.1 Mergers & Acquisitions (M&A)
– Drafting a Merger Plan – Outlines terms, share exchange ratios, and asset transfers.
– Shareholder Approval – Requires a 2/3 majority (or higher, per the company’s statute).
– Creditors’ Rights Protection – Creditors may object if their claims are jeopardized.
– NBR Registration – The merger must be registered with the NBR to take effect.
2.2 Debt Restructuring & Bankruptcy Prevention
Under Bankruptcy Law No. 8901, companies facing financial distress may negotiate with creditors to:
– Reschedule debts
– Convert debt into equity
– Enter into court-supervised reorganization
3. Cancellation (Striking Off) of Companies
A company may be administratively canceled if:
– It fails to submit annual financial statements for two consecutive years.
– It does not operate for over one year.
– The tax authorities request deletion due to tax violations.
Procedure for Administrative Cancellation
1. NBR Notice – The NBR issues a warning.
2. Objection Period – The company has 30 days to respond.
3. Final Decision – If no objection is filed, the NBR removes the company from the registry.
Note: Even after cancellation, shareholders and directors may remain liable for unpaid debts.
4. Key Legal Considerations
– Tax Obligations – Before liquidation, companies must settle all tax liabilities (Law on Tax Procedures).
– Employee Rights – Labor claims must be prioritized in liquidation (Labor Code).
– Creditor Protection – Failure to properly notify creditors may lead to personal liability for liquidators.
Conclusion
The liquidation, restructuring, and cancellation of companies in Albania involve strict legal procedures that require careful compliance. Business owners should seek legal counsel to navigate these processes efficiently and mitigate risks.
For further legal assistance on corporate matters in Albania, contact Alba Legal Albanian Law Firm.
This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for case-specific guidance.