Apr 20 2021

AMENDMENTS AND ADDITIONS TO THE LAW ON THE “JOINT STOCK COMPANIES”

Last week the Government has approved the draft on making amendments and additions to the Law on the “Joint Stock Companies”, which provides several new regulations aimed at development and improvement of the investment sector in Armenia. 

We are pleased to inform that the draft has been developed jointly by ADWISE Consulting, Armenian National Interests Fund (ANIF) and the ”Center of Legislation Development and Legal Researches” Foundation of the Ministry of Justice of the Republic of Armenia.

The draft law proposes a number of innovative regulations, which are in line with the current developments and tendencies in the global business community and improve Armenia’s investment climate for both local and foreign investors.

The draft law proposes, among others, the following:

• Issuance of different classes of ordinary shares;
• Significant flexibility for delegation of powers between the management bodies of the company;
• Allowing the existence of fractional shares, especially as a result of consolidation, which at its turn will exclude the vicious practice in the field of share consolidation in Armenia;
• Allowing the operation of companies with negative capital, which is especially important for IT startups and R&D companies;
• Elimination of the legal fiction in force for years and allowing payment of charter capital of the company after its state registration;
• Elimination of strict regulations of major transactions and liberalization of their execution;
• Elimination of the obstacles for the newly established companies to issue unsecured bonds in the first 3 years of their existence, which created great impediments for the start-up companies to seek funding opportunities right from the beginning. 

We thank our colleagues and partners, as well as the working group in the field of development of capital market for their participation in the discussions and proposals.

We are confident that these amendments will have positive impact on the economic development of Armenia amid these hard times.

To find out more please visit: 

http://www.parliament.am/drafts.php?sel=showdraft&DraftID=61916