ARMENIA Law and Practice Contributed by: Hayk Hovhannisyan and Tachat Voskanyan, HAP
issue these securities if it does not have enough authorised shares available for conversion. Notably, IC Armenia’s expert team developed legislative amendments within the SME Public- Private Dialogue Platform. These amendments, discussed under the Deputy Prime Minister’s leadership and approved by the Armenian Gov - ernment, added provisions to the Civil Code, the Law “On Limited Liability Companies,” and the Law “On JSC.” They introduced the concept of a convertible loan agreement and its key condi - tions based on international and local business practices. Specifically, it has been established that under a loan agreement where the borrower is a joint stock or limited liability company, it may be stipulated that instead of repaying the loan amount (or part thereof) and paying interest (or part thereof), the borrower is obligated under the conditions, procedure, and terms set forth in the loan agreement to issue and allocate a certain number, type, and class of shares to the lender or grant them a shareholding interest (convert - ible loan agreement). 4.5 Filing/Reporting Obligations The CB establishes a unified registry for deriva - tive financial transactions (Trade Repository). A normative legal act of the CB defines the pro - cedure and deadlines for registering derivative financial transactions, as well as the rules and conditions for maintaining the registry, submit - ting, processing, storing, and providing informa - tion. According to Decision No. 204-N of the CB Board, dated 15 September 2017, reporting enti - ties that enter derivative financial transactions subject to netting or offsetting and want to ben - efit from corporate income tax reductions under
Armenia’s Tax Code must submit a report to the Trade Repository. This report must include key details of the transactions. The report should contain information such as the reporting entity’s name (legal or full name), taxpayer identification number (TIN), transaction identification number, type of transaction, trans - action date, final settlement date, and settlement type, among other required details. 4.6 Transparency The Law “On state registration of legal persons, state record-registration of separate subdivi- sions, institutions of legal persons and individual entrepreneurs” state that the person registered in the territory of the RA shall, based on the results of due diligence envisaged by this Law, submit to the Agency a declaration concerning the actual beneficiaries thereof. Publicly listed companies or those fully con - trolled by another listed company only need to provide limited information if their shares are traded on a regulated market with disclosure rules equal to Armenian legislation. Besides revealing beneficial owners, Armenian law also requires companies to disclose the purpose of the acquisition or their intention to control the company. At the same time, to obtain prior consent to acquire a significant interest in an investment company, a person must also submit to the CB – through the intermediary of the investment company – sufficient and complete justifications disclosing the legality of the origin of the funds used to acquire a significant interest. Within three days of obtaining the CB’s prior con - sent for a merger, the merging investment com - panies shall publish an announcement about it
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