Organization of Commercial Companies

Organization of Commercial Companies

Organization of Commercial Companies companies are a product and part of new companies. They combine different “factors” (capital, labor, technology, and their natural, human, and social environment) for useful purposes. They are a fruitful tool for conducting a commercial activity, mostly when the enterprise has grown to such an extent that it is difficult to manage by a few persons. This is primarily when the enterprise seeks to increase the value of available funds.

Their functioning is based on individual economic planning, which, in a market economy, in contrast to the centralized economy, means the design and implementation of specific plans for each company. The economic activity of companies is not independent of legal institutions. The rules that define companies’ movement are part of a network of traditional institutions necessary for the proper functioning of the system, in general. The definition of decision-making competencies related to the planning and development of companies’ economic activity (administration) and the position of parties providing capital (investors as capital providers, and creditors as debt providers) is regulated in company law.

In some EU countries, the law also governs the parties’ position providing the labor force, through certain forms of co-decision, through employee councils, or participation in the heading or supervisory bodies of the company.
The law on companies defines an appropriate solution for consultation with employees, where the directors of the company and the representatives of each company’s employees have the opportunity to reach an agreement for the inclusion of employees’ representatives at the level of the board of directors. In this regard, Albania chose the approach applied by European legislation to companies, recognizing the negotiated involvement of employees in the decision-making process, through Regulation (EC) 2157/2001 on the statute of the European company, Directive 2001/86 / EC supplementing the law of the European company regarding the involvement of employees, Directive 94/45 / EC on the European Labor Council and Directive 2002/14 / EC on informing and consulting employees.

Albanian law on cross-border mergers of companies of 2012 is based on a similar framework. The broader legal framework for corporate activities includes the general provisions of several other legal and sub-legal acts, including but limited to, such the requirements of the Civil Code; conditions for registration and provision of information; bylaws on the use of electronic communication by companies.

The most common definition of corporate governance is the OECD’s use in the material “Principles of corporate governance,” where “corporate governance” is defined as the totality of the relationship between administrators, the board of directors, shareholders, and other stakeholders. Internal management also provides the structure through which the company’s objectives are set and how to achieve these objectives and monitor performance. Acceptable corporate governance practices should include appropriate incentives for the board of directors and administrators to achieve goals that are in the company’s best interests and shareholders and should enable effective monitoring.

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