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Section 2. Commercial law
DOI: http://dx.doi.org/10.20534/EJLPS-16-4-7-9
Gupi Marsidi, EuropianUniversity of Tirana, PhD (c) in Law, the Faculty of Law E-mail: marsid-gupi@hotmail.com
Joint stock company as a contract and an institution
Abstract: The concept of company interest is a terrain where two opposite theories contrast. In relation to joint stock companies or JSC this are the contractual and the institutional thesis. The institutional thesis: for this theory, which was borne in Germany after the First World War and spread in every country. The contractual theory: This theory in opposition to the first, denies that the public interest is greater that the interests of the shareholders.
Keywords: joint stock company, contract, institution, shareholders, company law, minority shareholders, administrative organs, economic development.
The concept ofcompany interest is a terrain where So JSC is seen as an institution alike a parliament
two opposite theories contrast. In relation to Joint stock where the majority is able to govern and chooses the
companies orJSC this are the contractual and the institutional thesis. These are not only theories defining the schemes ofnormative reality, but are also a philosophical reflection of joint stock companies. The two and more clearly the institutional theory were addressed to the lawmakers and interpreter to push forward the transformation of the right in true power.
The institutional thesis: for this theory, which was borne in Germany after the First World War and spread in every country, the essence was the interest of the company which surpassed by far the importance of the personal interests of the singular shareholders and was identified as the ventures itself. More precisely it was the interest for the production effectiveness of the venture seen as a general institution of economic development [1, 441-443]. The interest of the shareholders takes a second place and is dependent towards the company. This theory aims to regulate the internal relations of the JSC between the commanding capital (the majority shareholders), and the masses of minor shareholders.
This would protect the minority in all internal procedures of the company.
administrative organs while the opposition is represented by the minority shareholders. The institutional theory suggests that a JSC should dispose of a strong executive, able to interpret autonomously the requirements of the directory of the ventures. It should be an administrative organ far from the reach of the power of the assembly and uninfluenced by the greed of the majority shareholders.
The protection of the minority shareholders and other interest groups is done by securing an internal administration independent from the general assembly of the shareholders. The second aim of the institutional theory is the regulation of the in relations of the entrepreneurs (the entrepreneurs in this case are the shareholders and employers). The interest of ventures itself goes beyond that of the shareholders including the one of majority, it become a common interest of the shareholders and employees of the company leaving behind any interest even that of the commanding group. The employers must have a role in the commanding organs of the JSC as described in the law for "markets company low" and that could be a JSC with one or two levels [3, 54-59].
Section 2. Commercial law
The institutional theory reflects in the latest aspect a leading panorama of the economy, now in the latest state, it is a testimony that free trade market cannot be unchecked and controlled by casualty only. The contrary would bring down or damage the trade system.
Lastly there is something to consider about the institutional theory, together with entrepreneurship and public control over JSC are a liberal approach toward free trade market where the state has an important role. Even though it can bring obvious intervention of the public in the internal administration of a JSC, public control aims only to guarantee the respect of the rules by which the production system works.
The contractual theory: This theory in opposition to the first, denies that the public interest is greater that the interests of the shareholders. This defines the interest of the typical medium shareholder. More than a theory it is a way to express many more theories some of which are even contradictory to each other. The theory of the interest of the shareholders has many equivoques. It requires in the JSC the existence of a well-defined common interest for all shareholders, while in the JSC there is the internal conflict between majority and minority shareholders. It is not clearly shown which shareholders are protected, the leading or the investing ones. These are the one with the right to vote, or the one who does not have this privilege. This depends on the type of shares emitted; they can be even shares without the right to vote but with a priority in profit.
It must be considered, leaving the formula apart, the opinion of different authors that define the common interest of the shareholders as an opposite notion to that of which it must be. For some authors this interest contains even the interest of potential future shareholders or the long-term interest of the actual shareholders.
It is accepted that the social interest must take in consideration the changing in time of the shareholders. In this way it is taken into account even the future interest of the actual shareholders. This shows that there is little if none difference between the institutional and contractual theories in the results achieved. They both protect the leading group in the company in disadvantage to the minority shareholders, to protect the interest of future
shareholders and to maintain the long-term interest of the actual majority so a policy low dividends policy is required to ensure the effectiveness in production. This is done vice versa to protect the interest of the general interest of the entrepreneur class against the leading group in a company.
On contrary of the institutional theory, there is a theory which gives only importance to the actual groups of shareholders it states that the interest of future or potential shareholders is not included. The majority shareholders can make anything as long as they respect the contracts and laws of the company.
The concept of society interest it is used by this theory and is understood as the common interest of the shareholders, it restricts the power of the majority to protect minor shareholders it excludes also the interest of the company with the public one. So the base of this theory of opposition is the differences between social and extra social interest of the shareholders.
The society interest in itself is a neutral concept. Every social interest is inserted in the scheme of the contractual causality of a company, even the interest of maximizing the effectiveness ofproduction or the profit or maximizing dividends. Extra social interest represents something outside this contract and is something personal of one or many shareholders even the majority one. The majority is free to vote in which way it wants and to follow a policy that maximize effectiveness, scarifying the dividends or following a policy with high dividends scarifying the effectiveness. In any of the two cases in any case this choice must be done accordingly to the social contract mentioned above leaving apart the extra social interest [2, 187-188].
None of the above theories can explain the actual reality of the JSC. The contractual theory stating that no other interest is accepted other that the one common to the shareholders, blocks the possibility of new developments.
The Supervising Committee in Albanian legislation is inducted as a JSC in an administration system in two levels; it appoints the administrators and over watches the actions and the implementation of economic policies and activities. It can act as a coordinating organ between the interest ofthe shareholders and that of the workers of the company [4, 177-178].
This Committee aims to find a synthesis between these two interests. The English reform of 1980 broke the exclusivity of services between the shareholders and the administrators, giving to the second ones the duties to take into consideration the interest of the workers ofthe company in the same way as that of the shareholders. Seksioni 46. Text [1, 78-79].
Even in Italy the contractual theory has found contradictory elements with the 1974 reform. Not only the interest of minority shareholders
but even the interest of the potential shareholders in the form of the access to the information about the company is subject to public regulations by Consob (National Committee for the Trading Companies and Markets). There are subject of protection also the actions of the revising companies, that are in their way subject of public control by Consob. The social organs have the duty to prepare consolidated balances that protect the interest outside the group of actual shareholders.
References:
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2. Argita Malltezi, E drejta tregtare e shoqerive shqiptare, Mediaprint - 2009.
3. Ligji nr. 9901 i dates 14.04.2008 "Per tregtaret dhe shoqerite Tregtare", Botim i Qendres se Publikimeve Zyrtare, Korrik - 2010.
4. Argita Malltezi, Jonida Rustemaj, Armela Kromigi, Gjykatat Shqiptare mbi shoqerite dhe veprimtarine tregtare, Mediaprint, - Janar - 2015.
