ARMENIA LAW AND PRACTICE Contributed by: Aram Orbelyan, Narine Beglaryan, Artur Hovhannisyan, Lilit Karapetyan, Sarkis Knyazyan and Shushanik Stepanyan, Concern Dialog
• monthly for VAT and taxes on the income of individuals (if income is reported by an indi - vidual themselves, then the reporting is done annually); • quarterly for turnover tax (if the company operating within a turnover tax regime/simpli - fied 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 companies to disclose their financial statements. Depending on the type of business activity or size of the company, the law may specifically mandate companies to publish financial state - ments and financial audit reports. For instance, medium-sized or large companies, banks, insur - ance companies, and investment fund managers must meet this requirement. Starting from the year 2024, resident individu - als of Armenia (in the beginning, only certain groups of individuals, and from the year 2026, all resident individuals) will be obliged to submit a simplified income tax calculation to the State Revenue Service. 3.4 Management Structures General Notes on Management Structure The highest governing body of the company is its general meeting of shareholders (partici - pants). All companies 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 spe - cific areas, such as banking and insurance, must have a board of directors. The board of directors of an open JSC must have an audit committee under it.
Under its articles of incorporation, the company may declare and set forth the collective execu - tive body. The Powers of the General Meeting The general meeting approves the amendments to the articles of incorporation, decides on reorganisation and liquidation of the company, approves final, interim and liquidation balance sheets, and appoints the liquidation committee. The general meeting approves the number of board members, elects board members, termi - nates their powers and appoints and dismisses the executive body (unless these authorities are delegated to the board of directors). Increasing and reducing charter capital, approving the com - pany’s annual report, distributing dividends, and approving significant transactions and transac - tions with conflicts of interest are powers of the The Law on LLCs does not explicitly define the powers of the board of directors, allowing flexibility for these powers to be outlined in the articles of incorporation or charter. However, the board cannot exercise powers exclusively reserved for the general meeting or executive body. Conversely, the Law on JSCs provides a specific list of exclusive powers for the board of directors. It stipulates that, in the absence of a board of directors, these powers are exercised by the general meeting – except for those relat - ing to the organisation of the general meeting itself, which then fall under the competence of the executive body. general meeting as well. The Board of Directors The board of directors of a JSC determines and approves the strategy of the company, decides on using the reserve fund and other funds of the company, and approves (i) internal docu - ments regulating the activities of the company’s
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