Developments in the legislative framework of the Republic of Macedonia
Biljana Cakmakova
Cakmakova Advocates
Skopje
Biljana Cakmakova (Bio)
For the further improvement of the business environment and the position of the financial markets in the Republic of Macedonia, e-registration of companies, e-insolvency and a restructuring register and a register of disqualified entities have been introduced, with the purpose of attracting more foreign direct investment.
The Republic of Macedonia has also adopted new legislation on the protection of competition prescribing additional legal novelties and rules for companies already operating or due to operate on the market.
E-registration of companies
The Republic of Macedonia has further simplified the business start up process through the introduction of a legal basis for the electronic submission of applications and documents for the registration of a trade company. For that purpose amendments to the Company Law have been adopted in February 2011 (the Company Law Amendment).
Pursuant to the Company Law Amendment, the application for registration and the enclosures towards the same, can be also and only submitted in electronic form. The legal framework and instruments enabling this type of registration are also the already adopted law prescribing the data in electronic form and the electronic signature and the law for the one-stop shop system and the keeping of the trade register.
The electronic signature on the company's agreement or statement in electronic form substitutes the necessity for notarisation of the same. In this regard the e-registration of companies also makes cuts on administrative and notary costs required for the registration of a company.
Register of disqualified entities
A register of entities (physical persons and legal entities) disqualified from being founders of companies in the Republic of Macedonia has been also introduced with the Company Law Amendment, representing a legal blockade for entities with blocked accounts under which insolvency or liquidation procedure is still not commenced or opened, but not conducted in its entirety and physical persons prohibited to perform their profession, activity or duty or which have caused through criminal acts false insolvency or insolvency with untidy operations, malpractice of the insolvency proceedings or damaging of creditors.
E-insolvency and restructuring
The amendments to the Bankruptcy Law of April 2011 introduced e-insolvency and a restructuring register as a necessary tool for bankruptcy trustees/receivers, creditors and any interested party for following of insolvency proceedings from the very opening to the liquidation or the restructuring procedure of a certain company.
This register enables for greater transparency of the insolvency proceedings, strengthening of the liability of the bankruptcy trustee, acceleration of the insolvency proceedings and the easing of the procedure for the opening of insolvency proceedings in the Republic of Macedonia.
M&A
A New Law on Protection of Competition (LPC) entered into force in November 2010 (the LPC). The purpose of the LPC as a primary source of competition law in Macedonia is to ensure free competition on the domestic market to stimulate economic efficiency and consumer welfare.
The basic aim of the new LPC was further harmonisation of the national competition legislation with the EU legislation as well as improvement of the efficiency of the procedure conducted by the national Commission on protection of the competition.
One of the novelties of the law is that the participants in the misdemeanour procedure are entitled to be notified before passing the decision on existence or non-existence of misdemeanor and are entitled to provide their written response, comments and propose evidence to the Commission.
Also, the person against whom a procedure has been initiated may offer to the Commission undertaking of specific commitments by which the distortion of the competition caused by actions or failure to take action by that person shall be overcome.
Another legal novelty are the behavioral and structural measures that may be imposed by the Commission for the purpose of eliminating the harmful effects from the distortion of competition that have arisen by means of the misdemeanour.
Specific rules have been prescribed for the first time regarding imposing a fine to associations of undertakings, determination of the fine, and the leniency of program in the detection and sanctioning of the most difficult violations of the legal provisions.
From June 2010 to June 2011, several concentrations were notified to the Commission and all have been cleared in compliance with the law. No specific court decisions referring to merger control and concentrations were passed.
The decisions of the Commission by which it was determined there had been abuse of dominant position by the undertakings mainly on the relevant market of telecommunication services and the energy services became final and absolute in the second half of 2010.
Based on that, the Commission on misdemeanour matters in the first half of 2011 imposed fines against the undertakings for such activities that were found as misdemeanours.
Financial reporting
The international standard for financial reporting for small and medium sized trade subjects has been adopted. It shall be applicable from January 2012.