ANDORRA Law and Practice Contributed by: Elena Redondo, Albert Hinojosa and Marc Ambrós, Cases & Lacambra
• Act 7/2013, 9 May, on the regime for operat - ing entities in the Andorran financial system and other provisions that govern the financial activities in the Principality of Andorra; • Act 8/2013, 9 May, which covers the organi - sational requirements and operating condi - tions of the operating entities in the Andorran financial system, investor protection, market abuse and financial securities agreements; and • Act 10/2008, 12 June, governing the collec - tive investment undertakings of Andorra. In synthesis: • the governing body shall adopt the form of a board of directors, composed of at least three directors; • members of the board of directors shall be persons of recognised commercial and professional honourability and must possess adequate knowledge and professional experi - ence to exercise their duties; • the elected chairman cannot hold the position of general manager; • the board of directors shall draft and approve a set of internal operating rules to comply with legal obligations and promote responsi - bility among all members; and • both the management company ( soci- etat gestora ) and custodian entity ( entitat dipositària ) must comply with local rules on the conduct of business. 5.6 Annual Entity Maintenance and Accounting Compliance Costs associated with maintenance and account - ing compliance may vary notably depending on the particulars of each entity, business decisions adopted by the governing body, and whether or not it is a regulated entity. In a non-exhaustive manner, costs may be determined as follows.
• Limited liability companies ( societat limi- tada ) and public limited companies ( societat anònima ) are legally obliged to draw up finan - cial statements yearly, submit them to exter - nal audit (in certain cases, depending on the business volume and/or number of employ - ees) and deposit financial statements to the Companies Register ( Registre de Societats ). Moreover, the yearly maintenance fee for registering limited liability companies ( societat limitada ) and public limited companies ( soci- etat anònima ) with the Companies Register amounts to EUR851 and EUR935.50, respec - tively. • SICAV and real estate funds: due to their condition as regulated entities, the costs associated with maintenance and accounting are generally higher. Specifically, Andorran management companies ( societats gestores ) of collective investment schemes are subject to a yearly fee of EUR3,000 in the concept of supervision payable to the AFA. This fee increases by EUR2,000 if the specific man - agement company carries out the discretional and individualised management of invest - ment portfolios. The collective investment scheme is subject to the same fee, ranging from EUR1,800 to EUR3,300, depending on the type of vehicle. Collective invest - ment schemes must comply with accounting requirements stated in Act 10/2008, 12 June, governing the Andorran collective investment undertakings ( Llei de regulació dels organ- ismes d’inversió col·lectiva de dret andorrà ), which essentially are: (a) confidential financial statements (to be issued quarterly); (b) public financial statements (yearly as a minimum and subject to audit); and (c) external audit process (permanent; it cannot be the same auditor for a period exceeding five years; such audit entity
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