ARMENIA Law and Practice Contributed by: Hayk Hovhannisyan and Tachat Voskanyan, HAP
publish their audit opinion and annual financial statements within four months after the finan - cial year ends. They must also publish quarterly financial statements by the 15th of the month following each quarter. Publication means shar - ing information on a website or in the press. 7.4 Transaction Documents According to the general rule, there is no obli - gation to fully disclose any document regarding the transaction, except, as already discussed, information regarding the beneficial owner. The director (chief executive officer) of the company must act in the company’s best inter - ests, perform their duties honestly and reason - ably, and avoid any actual or potential conflicts between their personal interests and the com - pany’s interests (fiduciary duty). According to the Law on JSC, in M&A transac - tions, the director can acquire or buy back the company’s shares if this authority is granted by: • the decision of the general meeting; or • the company’s charter. 8.2 Special or Ad Hoc Committees RA doesn’t have specific laws or regulations on the formation and functions of special or Ad Hoc committees. However, company charters may allow for their creation. Despite this possibility, such committees are not commonly used in RA. 8.3 Business Judgement Rule 8. Duties of Directors 8.1 Principal Directors’ Duties The “Business Judgment Rule” is not yet specifi - cally defined in Armenian law. However, some legal regulations require Board members, the
Company director (CEO), and other officials to act in good faith, reasonably, and in the com - pany’s best interest, which reflects this principle. According to court practice, if the director can - not prove that their actions were in the com - pany’s interest, it is assumed that the company’s interests were violated. 8.4 Independent Outside Advice Independent consultation is common in the RA, and numerous legal and financial organisations offer such services. This process is regulated by a series of laws, including the Laws “On Advo- cacy,” “On Auditing Activities,” and other laws. 8.5 Conflicts of Interest The legislation includes mechanisms to prevent real or potential conflicts of interest between the company’s interests and those of the Board members, CEO (General Director), management bodies, management organisations, and manag - ers. According to the Law on JSC, these individuals must act in the company’s best interests, per - form their duties honestly and reasonably, and avoid conflicts between their personal interests and the company’s interests (fiduciary duty). At the same time, according to the same law, an interested party in company transactions is con - sidered to be a person affiliated with the com - pany who: • is a party to the transaction or participates in the transaction as an intermediary or repre - sentative; and • is an affiliated person to the party, intermedi - ary, or representative of the transaction. According to the Law on JSC, the following per - sons are considered affiliated with the company:
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