ARMENIA Trends and Developments Contributed by: Tachat Voskanyan and Artashes Petrosyan, HAP
HAP 4/3 Adonts street Yeraz business centre 3rd floor Yerevan Armenia Tel: +374 9140 3605 Email: hayk.hovhannisyan@hap.am Web: www.hap.am
Introduction In the business sector, it is important to have the necessary information about the forms and characteristics of corporate/business organisa - tions. Each organisation has its own distinct fea - tures which enable us to choose the right legal entity based on the business sector. In this guide the most frequently used and the most flexible organisations from a business perspective are discussed. The main profit-oriented organisa - tions are the: • limited liability company (LLC); • joint stock company (JSC); and • co-operative. Features and Characteristics of an LLC An LLC limits an owner’s liability to their invest - ment. It has flexible management and simple registration. The organisation can own property and distribute profits. It requires minimal capital and paperwork. An LLC also offers flexibility and risk protection. The Court of Cassation of Armenia has described an LLC as an economic company operating through the pooling of shares. In other words, a company in whose activities the degree of participation of a person is determined by the
percentage of that person’s share in the total authorised capital. The number of participants in the company must not exceed 49. If it does, it should be reorgan - ised into an open joint stock company (OJSC) or a commercial co-operative within one year. The company may be established through the: • incorporation of a new legal entity; or • reorganisation of existing companies, such as through a merger, division or transformation in line with corporate law provisions. The rights of the company’s participants are quite broad. They have the right to participate in company management, receive information about the company’s activities, receive the des - ignated share of profits etc. At the same time, it should be noted that participants have to make investments in the company’s charter capital. The property of an LLC consists of the invest - ments made by the owners and the property produced and acquired during the company’s activities. The company has the right to possess, use and dispose of the property owned by it at its discretion.
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