Closer to the EU – new amendments to the Moldovan law on joint-stock companies
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The Law No. 1134/1997 on joint-stock companies was amended in order to comply with the European standards, namely the Directive (EU) 2017/1132 of 14 June 2017 on certain aspects of company law and Directive 2007/36/EC of 11 July 2007 on the exercise of certain rights of shareholders in listed companies.
Consolidation of shareholders rights
In order to transpose the rights of shareholders provided for in Directive 2007/36 / EC, the law establishes the following:
- shareholders have the right to put unlimited items on the agenda of the general meeting, provided that each item is accompanied by a justification, as well as to ask questions and draft resolutions for items included or to be included on the agenda of a general meeting;
- every shareholder shall have the right to ask questions related to items on the agenda of the general meeting. The company shall answer the questions put to it by shareholders in 15 days;
- the company shall issue the convocation of the general meeting of shareholders not earlier than the date of the decision to convene the general meeting and not later than 30 days before the day of the ordinary general meeting. This period may be reduced to 14 days if the general meeting is held by electronic means;
- within 7 working days after the general meeting, the company shall publish on its Internet site the voting results from the general meeting.
Proxy voting rights
In addition, in order to comply with the aforementioned Directive, the law was amended with the following provisions on the proxy holders of the shareholders:
- A person acting as a proxy holder may hold a proxy from more than one shareholder without limitation as to the number of shareholders so represented. Where a proxy holder holds proxies from several shareholders, the applicable law shall enable him to cast votes for a certain shareholder differently from votes cast for another shareholder;
- The legal rule that restricted persons holding managerial positions (persoanele cu funcţii de răspundere) to act as proxy holders of the shareholders was abolished, except for the members of the board;
- Public interest entities shall permit shareholders to appoint and notify proxy holder by electronic means.
Compulsory information to be provided in the statutes or instruments of incorporation:
Also, some existing provisions related to the compulsory information to be provided in the articles of association have been completed:
- the number of shares issued for any contribution to the capital other than cash, as well as the identity of the person making the contribution;
- the total amount, or at least an estimate, of all the costs payable by the company or chargeable to it by reason of its formation and, where appropriate, before the company is authorized to commence business;
- any special advantage granted, at the time the company is formed or up to the time it receives authorization to commence a business, to anyone who has taken part in the formation of the company or in transactions leading to the grant of such authorization;
- the fixed value if the nominal value is not established at the incorporation of the company.
Moreover, the articles of association shall provide for the information on the contributions introduced into the share capital other than in cash. The evaluation report of these contributions shall be attached to the company’s articles of association, becoming its integral part.
The law establishes provisions regarding the minimum capital of companies. Thus, a gradual increase is provided in the minimum size of the share-capital from 20 000 MDL, as it is now, up to 600 000 MDL in three years after the law enters into force.
In addition, the law provides that an undertaking to perform works or supply services may not form part of the share capital assets.
Also, the amendments set out the requirements related to the shares issued in exchange for non-pecuniary contributions. Thus, the experts’ evaluation report may not precede 12 months before the date of approval by the company’s board of the market value of these contributions. The report shall be attached to the company’s articles of associations, becoming part of it, including for registration with the body of state registration.
Moreover, the company is obliged to register its ownership of the transmitted goods within two months of the capital increase.
Also, the law establishes the following deadlines for publishing the resolution on the capital increase:
- 7 working days from the date of its approval for public interest entities and for entities whose transferable securities are admitted within the multilateral trading system;
- 15 days from the date of its approval – for companies other than those mentioned above.
Annual general meeting
It was established that the general meeting can be held using electronic means.
Moreover, the law provides a quorum of more than half of the voting shares of the company for the approval of resolutions by the general meeting on matters such as the approval of the mergers/divisions and the increase of the share capital.
Also, decisions to amend the way transferable securities are traded are adopted by two-thirds of the total number of voting shares.
Mergers and divisions
The law sets out new requirements regarding the draft terms of mergers/divisions and the examination of the draft terms by experts.
Furthermore, the draft terms of merger and division shall be published, for each of the merging companies, at least 30 days before the date fixed for the general meeting which is to decide thereon. Any of the merging/dividing companies shall be exempt from the publication requirement laid down above if it makes the draft terms of such merger/division available on its website free of charge for the public.
Also, all shareholders shall be entitled to review the documents related to the merger/division before the general meeting which will decide on the draft terms of merger/division.
What is more, detailed regulations have been established on the exceptions applied for mergers via the acquisition of one company by another which holds 100 % of its shares.
Certain aspects of the division by acquisition have been clarified by introducing the concept of “recipient companies” (companies receiving contributions as a result of the division).
The new provisions enter into force on 01 January 2021.
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