ARMENIA LAW AND PRACTICE Contributed by: Aram Orbelyan, Narine Beglaryan, Artur Hovhannisyan, Lilit Karapetyan, Sarkis Knyazyan and Shushanik Stepanyan, Concern Dialog
3.2 Incorporation Process The process of incorporation of both LLCs and JSCs is fairly straightforward. The registration of both types of entities before the Agency for State Register of Legal Entities of the Republic of Armenia (the “Agency”) is free of charge. How - ever, JSCs must engage private entities (account operators) licensed by the Central Depository for share registry keeping, incurring additional expenses compared to LLCs. The process of registration itself takes no more than two working days after submitting the nec - essary package of documents. For JSCs, the registry-keeping process may be longer, as account operators conduct KYC and due dili - gence procedures before entering into registry keeping agreements. Foreign investors should consider the following nuances in the incorpora - tion process. Template (Pre-approved) Package-Based Registration of LLCs If the founder(s) of an LLC is an individual, and both the director and the founder(s) are in Arme - nia, the establishment process is relatively quick. They can simply visit the Agency with their pass - ports (and verified translations if applicable) and answer basic questions from an Agency employ - ee. The employee will provide a standard, pre- approved template package (in Armenian), and the company can be registered in under half an hour, free of charge. The Standard Process of Establishment and Registration of LLCs As an alternative, the founding and governing documents of the LLC (founding decision, char - ter) can be drafted to meet the specific needs and requirements of the founders, including preparing multilingual versions (the Armenian version shall still prevail), establishing specific
with the Law on JSCs regulating specific require - ments and the scope of authorities of such a board. In contrast, the Law on LLCs is silent on most of these issues, allowing the companies to determine the scope at their discretion. The main differences between the two types of entities are as follows. LLCs are preferred when the shareholding and management structures are straightforward and less complex. For JSCs, it is possible to have multi-layered, complex management structures (including the collegial executive body) and regulate the relationships between the share - holders, including through shareholders’ agree - ments, etc. Furthermore, in LLCs, the participant has a right to exit from the company without the consent of the other participants and request the company to pay the market value of its share. The partici - pant with 10 or more percent in the charter capi - tal may bring a claim to remove the participant from the company if that participant hinders the company’s activities. Finally, a significant difference to consider is that the information on the participants of LLCs is open to the public; however, in the case of JSCs, the information on shareholders is maintained by private registry keepers and is not provided to third persons without the company’s consent. At the same time, since 2023 all the companies are obliged to disclose their UBOs, and that infor - mation on UBOs is publicly and freely available on the webpage of the State Registry of Legal Entities. Therefore, irrespective of the corporate type, the information on the UBOs of any com - pany is publicly available.
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