ARMENIA Law and Practice Contributed by: Aram Orbelyan, Narine Beglaryan, Artur Hovhannisyan, Lilit Karapetyan, Sarkis Knyazyan and Shushanik Stepanyan, Concern Dialog
While changing the participation in an LLC, the articles of incorporation must be changed as far as it is man - datory to include that data in the articles of incorpora - tion and keep them up to date. Information about shareholders of a JSC is not required to be included in its articles of incorporation except at the stage of incorporation of the company (ie, the initial registration of the articles of incorpo - ration). Thus, a shareholder change must only be recorded in the company’s shareholders register by the account operators. UBO There is an obligation to submit a declaration to the Agency in the case of a change of UBO. The legal entity shall submit the following report/infor - mation to the Agency by 20 February of each year: • confirmation that the information on the UBOs submitted to the Agency in the last declaration was still accurate as of 31 December of the previous year; or • changes in the information on the legal entity’s UBOs. In the case of a change of data regarding beneficial owners, the change must be declared immediately after the disclosure to the legal entity but not later than 40 days after the change. The declaration on the UBOs and further changes in the declaration are submitted to the Agency through the website bo.e-register.am (see the procedure for filling out the application below). In this case, the declaration shall be signed via electronic signature accepted by the government. Completion of the dec - laration is possible through an authorised person, in which case a power of attorney is required. Liability for failure by an entity obliged to submit a declaration on UBOs to file such declaration within the period prescribed by law, for submitting it in violation of the law or for inadvertently providing incorrect or incomplete data in the declaration, is governed by the RA Law on Administrative Offences. Such breaches can result in a warning or a fine of up to AMD100,000.
In addition, if the declaration on the UBOs contains false information or lacks information which should have been included, and the person submitted the false information wilfully, they can be held criminally liable. In addition, if the obligation to submit confirmation or amended information on UBOs is violated each year for three years in a row, as well as in cases of repeated or gross violation of the rules regarding submitting a declaration, the Agency may apply to the court to dis - solve the legal entity. Approval of Financial Statements Companies need to submit financial statements to the State Revenue Service: • annually for profit taxes; • monthly for VAT and taxes on the income of individuals (if income is reported by an individual themselves, then the reporting is done annually); • quarterly for turnover tax (if the company operating within a turnover tax regime/simplified system for small businesses); and • annually for micro-taxes (if the company pays taxes under this special regime). As a general rule, there is no requirement for compa - nies to disclose their financial statements. Depending on the type of business activity or size of the com - pany, the law may specifically mandate companies to publish financial statements and financial audit reports. For instance, medium-sized or large compa - nies, banks, insurance companies, and investment fund managers must meet this requirement. 3.4 Management Structures General Notes on Management Structure The highest governing body of the company is its gen - eral meeting of shareholders (participants). All compa - nies need to have at least one executive body. There are specific cases defined in the law when the company must have a board of directors. Open JSCs or companies with activities in specific areas, such as banking and insurance, must have a board of direc - tors. The board of directors of an open JSC must have an audit committee under it.
32 CHAMBERS.COM
Powered by FlippingBook