ARMENIA Law and Practice Contributed by: Hayk Hovhannisyan and Tachat Voskanyan, HAP
In some cases, company charters may include additional protective measures for directors. 9.3 Common Defensive Measures To prevent hostile takeovers, JSC can use vari - ous defensive strategies. According to Armenian law, these measures can be outlined in the com - pany charter, shareholder agreements, or board of directors’ decisions. One protective meas - ure under Armenian law applies to closed JSC, where shareholders have the pre-emptive right to buy shares sold by other shareholders. This helps maintain company stability and prevent unexpected changes in ownership. Additionally, in cases where concentrations (mergers or acquisitions) must be declared, the Competition Commission can reject the trans - action if it is found to harm competition in the market. The Commission may also approve the concentration with conditions, such as limiting certain shareholder rights to protect fair com - petition. 9.4 Directors’ Duties According to the Law “On JSC,” the company director (chief executive officer): • manages the company’s property, including financial resources, and enters into transac - tions on behalf of the company; • represents the company in the RA and abroad; • acts without a power of attorney; • issues powers of attorney; • concludes contracts, including employment contracts, in the established manner; • opens the company’s settlement (includ - ing foreign currency) and other accounts in banks, and in cases provided by law, may also open accounts in the treasury;
• submits to the board for approval the com - pany’s internal work regulations, regulations of separate divisions, the company’s adminis - trative structure, and staffing; • within the scope of their authority, issues orders and instructions, gives mandatory directives for implementation and monitors their execution; • hires and dismisses Company employees in the established manner; and • applies incentives and disciplinary measures to employees. It is important to note that the Charter may also define other powers of the company’s director (general director). In limited liability companies (LLCs) in RA, the executive body (such as the general director or president) is elected by the general meeting of participants. This person can be either a partici - pant of the company or an outsider. The executive body has the authority to do the following. • Act on behalf of the company without need - ing a power of attorney, including represent - ing the company and signing contracts. • Issue powers of attorney to others to repre - sent the company, including powers with the right of substitution. • Appoint, transfer, or dismiss company employees, apply incentives, and impose disciplinary penalties. • Perform other duties not assigned to the general meeting or board by law or the com - pany’s charter. • The company charter, internal documents, and the contract with the executive body regulate the executive body’s activities and decision-making process.
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