Armenia increases transparency of joint-stock companies

ArmInfo. Armenia makes adjustments to the regulatory and legal regulation of the activities of joint-stock companies. Amendments to the law "On Joint Stock Companies" were approved at a meeting of the Armenian government on November 23.

As the Minister of Economic Development and Investments of Armenia Suren Karayan pointed out, the government's legislative initiative is conditioned by the need to improve Armenia's indicators in the World Bank's Doing Business report on the level of protection of small investors, shareholders. In addition, the goal is to increase the level of transparency in the management of joint-stock companies.

According to the amendments, it is offered to affiliated persons with the company before the conclusion of the transaction to disclose the circumstances connected with affiliation. At this stage, as explained by the minister, this duty implies only the disclosure of the fact that the person is a party to the transaction, an intermediary or representative, without clarification of the details.

The second innovation provides for the inclusion in the register of shareholders of information about the rights and obligations of members of the boards of directors of joint-stock companies for positions in another company. For today, this regulation does not imply the specification of the functional duties of this person.

In addition, the proposed amendment prohibits the combination of the posts of the Chairman of the Board, the Director and the General Director of OJSC (open joint-stock companies). At present, this restriction applies to companies with more than 500 shareholders. "With the adoption of the bill, it is expected to increase the transparency of the process of managing joint-stock companies, to improve the mechanisms for disclosing a conflict of interests, as a result, to protect small investors," concluded Suren Karayan.

It should be noted that in the annual World Bank's Doing Business ranking, devoted to the conditions of doing business in the countries of the world, Armenia deteriorated its position by 9 points. The Republic is located on the 47th place, between Italy (46th place) and Hungary (48th place). Despite the worsening of the position, Armenia improved its performance on several rating criteria. In particular, the World Bank experts note the progress recorded in Armenia in terms of "business start-up", "construction permission", "connection to electricity networks", etc. Meanwhile, as early as September 2016, the leadership of the Ministry of Economic Development and Investments of Armenia promised to improve its positions in the World Bank rating by 10 points. In the World Bank's "Doing-Business-2016" rating, Armenia took 35th place among 189 countries, having risen for 3 years in a year. In 2014 Armenia was on the 45th place, in 2013 - on the 49th. The annual Doing Business survey assesses the "procedural" comfort of doing business on the basis of ten indicators, such as business registration in Armenia, ease of issuing construction permits, ease of connection to electricity networks, ease of international trade, quality of tax administration and so on. In the framework of this study, comprehensive quantitative data are collected and analyzed to compare the conditions for regulating entrepreneurial activity between countries and in dynamics. The Doing Business project, which began in 2002, focuses on the activities of national small and medium-sized enterprises and the assessment of regulations that regulate their activities throughout the life cycle.