THE TRADE ENTERPRISE LAW

Part one

INTRODUCTORY PROVISIONS

Head one

TRADESMAN,INDIVIDUAL TRADESMAN,TRADE ENTERPRISE

Division one

Tradesman according to activity

Art.1

A tradesman according to this Law is every legal entity or a physical person independently performing any of the following activities :

1. purchase and sale of movables regardless of the fact whether they are sold unchanged, processed or or reprocessed;

2. trade with securities;

3. purchase of movables for their processing or reprocessing for other persons,provided that the work exceeds the scope of a “ smaller craft”;

4. banking activities;

5. insurance;

6. transportation of persons and goods;

7. commission work,forwarding,storing and leasing;

8. trade agency and mediation;

9. catering-tourist activity,information activity,marketing or performing other trade services;

10. production of motion pictures ,video tapes,audovisual recordings,software as well as other similar activities;

11. publishing and printing activities and other connected with trade with books and art works ;

12. purchase,construction and arranging of immovables for sale.

Tradesman according to the nature and scope of activity

Art.2

1. A tradesman according to this Law is also every person conducting a business deal which according to the nature and the scope of activity has to be organized and conducted in a way in which trade activities are conducted although not mentioned in Art.1 of this Law,provided that the company has been entered in the trade register.

2. The provisions of this Article are applicable also in the field of agriculture and forestry only in respect to the business deals for processing or reprocessing of the own agricultural and forest products.

3. Persons dealing with free occupations ( advocates,public notaries,doctors,patent engineers ,architects,artists ,accountants etc.) are considered tradesmen according to this Law if the regulations according to which they are performed stupilate for so.

Tradesman according to description

Art. 3

Should the company be entered in the trade register,it may not be claimed that the business deal conducted under the name of that company is not trade one.

Persons not considered tradesmen

Art.4

According to this Law,the following persons are not considered tradesmen :

1. physical persons dealing with agriculture ( farmers)

2. craftsmen and persons rendering services or having free occupations,except for occupations which could be treated as business deal according to Art.2 point 1 of this Law ,and

3. persons rendering catering services by renting rooms in their own homes.

Application of provisions for the tradesman on persons performing trade activity

Art. 5

The provisions of this Law about the obligations of the tradesman are applicable also to persons performing trade activities regardless of the fact that they are not allowed to perform them ,according to the regulations for such activity,or do not comply with the conditions for performing of such activity.

Small -scale tradesman

Art. 6

1. The provisions of this Law about the company,business books and the management do not refer to persons not considered tradesmen according to this Law ,and are dealing with a small scope of trade activity.

2. Trade activities considered small - scale activities and the manner of conducting of thier business books are stipulated for by a regulation adopted by the ministry competent for economic matters in compliance with the ministry competent for finance matters ,in accordance to the scope of the business deal in the corresponding activity.

3. For carrying of a small-scale trade activity a public company or a limited partnership company can not be established.

Provisions for the small-scale tradesman are not applied to the companies

Art. 7

The provisions of this Law regulating the work of the small-scale tradesman are not applicable to the relations of the joint-stock company,the limited liability company and the limited partnership joint-stock company.

Division two

INDIVIDUAL TRADESMAN

Individual tradesman

Art. 8

1. The individual tradesman shall be the person performing any of the activities from Art.1 of this Law as an occupation.

2. Any business-capable person with permanent place of residence in the Republic of Macedonia may be registered as an individual tradesman.

Limitations

Art. 9

The following persons can not be registered as individual tradesmen:

1. the one over which liquidation procedure has been applied;

2. the one that has deliberately gone bankruptcy and the creditors can not settle their outstandings.

Entry into the the trade register

Art.10

1. The individual tradesman is entered into the trade register on the basis of an application containing :

· the name and surname,place of residence,address and main number;

· the trade name under which the activity shall be carried out;

· the seat and address where the activity shall be carried out;

· subject of work.

2. The application shall be accompanied by a form for the authorized signatory and a statement that the tradesman is not deprived of the right to performing any of the activities set forth in Art.1 of this Law.

3. A person may register only one trade name as an individual tradesman.

Trade name of the individual tradesman

Art.11

1. The trade name of the individual tradesman shall contain his personal name,his father’s name and the surname.

2. The trade name of the individual tradesman must contain the designation “TE”.

Transfer of a trade name

Art.12

1. The trade name of the individual tradesman may be transferred to a third party together with its business deal.

2. The transfer of the trade name from point 1 of this article may be done by the individual tradesman upon his claimants consent.

3. The individual tradesman’s successors undertaking the business deal may keep the trade name of the individual tradesman.

4. In cases from point 1 and 3 of this Article ,the name of the new owner is attached to the trade name.

5. The transfer of the trade name is entered into the trade register and is published in the “Official Gazette of the Republic of Macedonia”.

Joint and several liability with the former owner

Art.13

1. The person continuing the work under the former firm,with or without an addition pointing out the change of owner ,has a joint and several liability for the obligations with the former owner unless otherwise stipulated for with the creditors.

2. The outstandings are settled by the creditors from the former owner first.

Termination of the work of the individual tradesman

Art.15

1. The individual tradesman shall report the termination of the work

to the competent organ for public incomes.

2. The individual tradesman latest three months prior to reporting of the termination to the organ from point 1 of this Article in a proper manner ( in the daily press,business premises etc) shall announce the termination of work and shall cite the date of termination of work.

3. The provision from point 2 of this Article is applied also when the individual tradesman intends to sell the enterprise or to invest in a company.

Division three

The concept of a trade enterprise

1. The trade enterprise (hereinafter referred to as : the enterprise) is association of two or more physical persons and legal entities investing money,objects and rights into property which they make use of in the joint work and jointly share the profit or losses of the work.

2. Persons investing in the main capital assets are founders of the enterprise (hereinafter referred to as Founders) i.e. shareholders of the enterprise (hereinafter referred to as Shareholders).

3. The rights and liablities the founder aquires according to the deposit in the main capital assets are his share in the enterprise (hereinafter referred to as Share).

Forms of Trade Enterprises

Art.18

1. According to the form,regardless of the activity ,the enterprise may be :

· a public company;

· a limited partnership company

· a limited liability company;

· a joint-stock company

· a limited partnership joint-stock company

2. The enterprise may be founded only in form and manner prescribed by this Law.

3. For performing banking activities,trade with securities and insurance,only joint-stock companies may be founded.

4. As an exception in point 3 of this Article, for performing of banking activities through a savings-bank and exchange office and for activities of mutual insurance ,also limited liabilitiy companies may be established.

Agreement,i.e.Statute of the Enterprise

Art.19

1. The form ,the duration,trade name,seat,the subject of work,the amount of the main capital assets as well as the organization and management of the enterprise are set forth by the Agreement i.e. the Statute of the enterprise.

2. The Agreement is concluded in written form as well as the changes in it and its annexes.

3. The contents of the Agreement. i.e. the Statute of the enterprise is stipulated by the founders in compliance with the Law.

4. In order to the to make the preparations for founding of an enterprise ,the founders may agree on the activities that are to be carried out. Should the parties fail to fulfill the obligations undertaken by the Agreement,they are liable only for the damage caused .

Duration of the Enterprise

Art.20

Should the Agreement i.e. the Statute of the enterprise not stipulate the duration of the enterprise,it is considered to be established for an indefinite period of time.

The Enterprise as a Legal Entity

Art.21

1. The enterprise as a legal entity may aquire rights and undertake obligations , aquire ownership over other actual rights, sign contracts and other legal dealings, bring charges and be defendant.

2. The enterprise shall gain the status of a legal entity from the date of its entry into the trade register.

3. The founder,i.e. the person acting in the name of the enterprise prior to its gaining of the status of a legal entity,shall have a joint and several liability for the undertaken obligations with the other founders in case when the enterprise which is correctly constituted and entered into the trade register,does not accept the undertaken obligations. Should the enterprise accept the undertaken obligations,it is considered to have undertaken them from the day when they had arisen.

4. In case when during acting of the founder in the name of the enterprise in the founding procedure,the founders have aquired any rights, they are obliged to transfer them to the enterprise after the entry into the trade register,provided that the enterprise approves.

Kinds of liability for the obligations

Art.22

1. For its obligations,the enterprise shall be liable with all is property.

2. The founders of the public company and the complementary partners in the limited partnership company shall have a personal,joint and several unlimited liability for the obligations of the company with all their property.

3. The founders in the limited liability company ,the shareholders in the joint-stock company as well the dormant partners in the limited partnership company are not liable for the obligations of the company,unless stipulated for in this law.

Special liabilities of the founders

Art.23

1. The founders of the enterprise are liable for the obligations of the enterprise also in the following cases:

- if thay had abused the enterprise as a legal entity for achieving aims which for them as individuals are forbidden;

- if they had abused the legal entity in order to do damage to their creditors;

- if contrary to the law they had disposed of the property of the legal entity as if with thier own property ;

- if in their favour or in favour of any other person they had reduced the property of the enterprise ,and had been aware or had to be aware that the company is not able to fullfil all its obligations toward third parties.

2. Point 1 of this Article is appropriately applicable to the liability of the secret founder.

Persons who may establish an enterprise

Art 24

1. An enterprise may be established by domestic and foreign physical persons and legal entities.

2. A foreign person ,in accordance with this Law ,shall be every legal entity having a trade name entered in a trade register abroad or entered in a trade register in his country and every physical person which is a foreign citizen,or a fugitive.

3. A citizen of the Republic of Macedonia bearing also another citizenship shall chose whether he would use the position as a citizen of the Republic of Macedonia or the one of a foreign person.

4. Each person of point 2 of this Article who aquires a share or shares in an enterperise or invests assets in it on an agreement basis ,has the status of a foreign person.

Right to participation in founding of an enterprise or being a founder in many enterprises

Art.25

1. Anyone may participate in founding of an enterprise or be a founder or shareholder in more enterprises unless forbidden by this Law.

2. An enterprise may be founded by at least two founders ,i.e. at least two founders are required for its existance.

3. A physical person may at the same time be a founder of unlimited liability in one enterprise only. A public company and a limited partnership company may not be a founder of unlimited liability in another enterprise of that type.

Conditions under which a foreign person may be a founder of an enterprise .i.e. a shareholder

Art.26

1. A founder,i,e, shareholder may be any foreign physical person or legal entity.

2. A foreign person may found an enterprise or to aquire shares in the manner and under conditions set forth for the citizens of the Republic of Macedonia and for the legal entities entered in the trade register on the territory of the Republic of Macedonia unless otherwise provided by law.

3. Participation of a foreign person in a newly founded and in an existing enterprise is not limited unless otherwise stipulated for by another law.

4. The enterprise with foreign participants has all the rights and liabilities as an enterprise without foreign participants ,except for the cases prescribed by law.

Approval for founding of an enterprise by foreign persons

Art.27

1. For founding of an enterprise which is fully owned by one or more foreign persons.i.e. in which they are in majority,for transformation of the enterprise into an enterprise of that type, or for aquiring majority of foreign persons in the enterprise an approval is required from the ministry competent for the issues on the foreign economic relations.If within 60 days from the day of submitting of the application approval is not received ,it is considered for the approval not to be given.

2. If the foreign participation does not reach the participation set forth in point 1 of this Article,for founding of an enterprise i.e. for aquiring participation in an existing enterprise, an approval is not required.The aquired participation in the newly founded enterprise .i.e. in the existing enterprise is entered in the foreign investments register kept in the ministry competent for foreign economic relations.

Rights of foreign persons

Art.28

1. The rights aquired by virtue of the invested assets in the enterprise ,may not be changed or reduced by a law or other regulation.

2. The share of the profit belonging to a foreign person ,i.e. the amount belonging to a foreign person in case of termination of the enterprise or partial or total abalienation of the share of a foreign person ,may,by order of the foreign person ,be freely ,without permission, transferred abroad in the currency of the investment provided that the company posesses money funds .

3. The discounts and special privileges for investments and operation by foreign persons are prescribed by law.

Statement for founding of the enterprise

Art.29

1. The founders and the first members of the managing bodies ,i.e. supervising bodies shall submit a statement to the registration court citing the activities performed for founding of the enterprise and claiming that the enterprise has been founded in accordance with the law.

2. Should the person listed in point 1 of this Article fail to submit the abovementioned statement,the registration court shall reject entering of the founding into the trade register.

Statament in case of change of enactments of the enterprise

Art.30

1. The provisions from point 29 of this Law are applicable also in case of change of the agreement i.e. the statute of the enterprise.

2. The statement is submitted by the managing bodies members i.e. the supervising bodies members performing this function at the time of change of the agreement i.e. the statute of the enterprise.

Joint and several liability for damage while founding of the enterprise

Art.31

1. The founders of the enterprise as well as the first members of the managing and supervising bodies shall have a joint and several liability for the damage done due to the non - entering of any of the obligatory provisions stipulated by this law in the agreement i.e. in the statute of the enterprise,or due to missing or incorrect carrying out of the procedures prescribed by the law or due to non - enforcement of the other regulations on founding of an enterprise.

2. The point 2 of this Article is applicable also to change of the agreement i.e. the statute of the enterprise with regard to the members of the managing and supervising bodies performing this function at the time the change has taken place.

Impossibility for invoking invalidity of the agreement

or the statute of the enterprise

Art.32

1. After the entry of the enterprise into the trade register noone of the founder may invoke invalidity of the agreement i.e. the statute of the enterprise due to error, fraud or threat taken place at the time of conclusion of the agreement i.e. adoption of the statute of the enterprise.

2. The provision from point 1 of this Article is applicable also to the changes in the agreement i.e. the statuteof the enterprise.

When is an enterprise considered not founded

Art.33

1. The enterprise is considered not founded in case of breach of the law which could not be removed.

2. Each person having legal interest may require for the registration court to declare non founding of the enterprise.

3. The enterprise which is considered not to be founded shall be officialy deleted by the court from the trade register

4. For the undertaken obligations,the founders have a joint , several and unlimited liablity.

Obligations of the founders for investing in an enterprise

Art.34

1. At the time of founding,the founders place the property of the enterprise to the disposal of the enterprise.

2. The property of the enterprise at the time of founding shall consist of money and non-money deposits of the founders. The non-money deposit may consist of objects (movables and immovables) as well as of rights having value of property.

3. A founder of the enterprise entering a non-money deposit is liable toward the enterprise that the value of his deposit at the time of placing to disposal corresponds to the value stated in the agreement of the enterprise ,unless otherwise stipulated for by this Law.

Right to sharing the profit and the losses of the founders

Art.35

1. The founders shall share the profit belonging to them in the enterprise.

2. Unless otherwise agreed upon in the agreement or pescribed by the statute of the enterprise ,each founder shall participate in the sharing of profit and covering of losses proportionate to their share.

Decision making by the founders

Art.36

1. The decisions in the enterprise are reached upon all founders’ consent unless otherwise prescribed by the agreement of the enterprise.

2. All founders in the enterprise have the right to managing of the enterprise ,unless the agreement i.e. the statute of the enterprise entrusts the managing of the enterprise to one or more founders or to third party i.e. parties.

3. Should the agreement i.e. the statute of the enterprise stipulate for the decisions to be reached by majority of votes ,the type of majority shall be determined. Should the type of majority not be determined ,the decisions shall be reached by majority of votes of the total votes representing the deposits ,proportionate to the share of thier deposits in the main capital assets.

Limitation for a founder to perform certain activities

Art.37

A founder must not perform activities on his account that would harm the objectives of the enterprise.

Mutual obligations of the founders for the expenses or

the obligations undertaken

Art.38

1. Should a founder bear expenses which according to the circumstances are considered necessary or should he suffer damage due to activities that have been dangerous,the enterprise shall be obliged to cover the expenses to him.

2. The founder may require advanced payment for the expenses necessary for performing of certain activities.

3. The founder shall without delay deliver to the enterprise all benefits he has received from third parties for conducting of the work of the enterprise and has derived from managing of the enterprise.

4. Unless otherwise prescribed by this Law,the founder has a right to reward for his personal work in the enterprise.

The obligation to act with the attention of an accurate and conscientious tradesman

Art.39

1. Every founder is obliged to act with the attention of an accurate and conscientious tradesman in the course of performing activities for the enterprise .

2. The founder is liable for the damage he has deliberately ,or out of negligence done to the enterprise.

3. The founder of the enterprise authorized for managing who receives compensation for his work is also liable as the representative.

The right of the founder to be informed

Art.40

1. Every founder of the enterprise ,even when does not participate in managing ,has the right to be personally informed about the work of the enterprise ,to have access to the business books and other enactments,as well as to review the financial situation for its personal use.

2. Any provision set forth by the agreement of the enterprise deviating from point 1 of this Article shall be considered null and void.

Legal regime of the property of the enterprise

Art.41

1. The money,object and rights transferred to the enterprise or aquired by the enterprise shall belong to the enterprise.

2. A creditor of a founder of the enterprise may not settle his outstandings from the property of the enterprise .

3. A creditor of the enterprise may not settle his outstandings from the property of a founder i.e. founders of the enterprise ,except for the cases prescribed by this Law.

Settling of disputes by mutual consent or in court

Art.42

1. Disputes between the founders of the enterprise concerning the agreement of the enterprise ,should be settled by the founders by mutual consent.

2. The founders of a public company and the complementary partners in a limited partnership company may settle disputes concerning the company agreement in court at the Economic Chamber of the Republic of Macedonia,if so agreed upon by the parties in the company agreement.

Protection of the rights arising from the founders relations

by the registration court

Art.43

Should the rights arising form the founders relations be violated by the bodies of the enterprise ,every founder may require protection of those rights from the court keeping the trade register (hereinafter referred to :registration court) according to the seat of the enterprise.

Application of the law according to the seat

Art.44

1. This Law is applied to enterprises with seats on the territory of the Republic of Macedonia.

2. Third parties may refer to the seat set forth in the agreement i.e. the statute of the enterprise ,unless otherwise stipulated by this Law.

3. In dealings with third parties,the enterprise may not refer to another seat should its seat be in some other place.

Control over the enactments of the enterprise

Art.45

1. The registration court shall have the agreement for founding of the enterprise controlled,as well as the agreement i.e. the statute of the enterprise and other enactments for the organization and work of the enterprise ,in compliance with the regulations applied to the organization and the work of the enterprise i.e. the provisions of the agreement for founding of the enterprise ,the agreement ,the statute and the other enactments of the enterprise.

2. The control from point 1 of this Article shall not comprise the issues which are decided upon in other court or in an administrative procedure.

3. Unless otherwise prescribed by this Law, the concept of court according to this Law refers to the local competent court according to the seat of the enterprise.

Announcement of data or reports

Art.46

When the law or an enactment of the enterprise prescribes an obligation for announcement of certain data or reports of the enterprise ,the announcement shall be made in the “Official Gazette of the Republic of Macedonia” unless otherwise stipulated for by this Law.

Entities to which the Law is not applied

Art.47

This Law is not applied to founding,organization,work and termination of public enterprises,public institutions and other institutions ,the cooperations,association of citizens and other forms of organizing not performing any of the activities determined by Article 1 of this Law.

Part two

TYPES OF TRADE ENTERPRISES

Head one

PUBLIC TRADE ENTERPRISE

Division one

THE CONCEPT OF A PUBLIC TRADE ENTERPRISE

AND FOUNDING

The concept of a public trade enterprise

Art 48

1. A public trade enterprise ( hereinafter referred to as :public company) shall be an association of two or more legal entities which toward the creditors have a personal unlimited joint and several liability for the obligations of the enterprise with all their property.

2. A public company shall be founded with an agreement of the company concluded by the founders.

Trade name

Art.49

1. The trade name of the public company shall contain the surnames and the names ,i.e. the trade name or the abbreviated trade name of at least one founder of the company and the designation “and others” should the trade name not contain the surnames and the names of all founders.

2. The trade name shall also contain the words “public trade enterprise” or the abbreviation “pte”

Agreement of the company

Art.50

1. The agreement of the company shall be concluded in writing.

2. The signatures of the founders shall be verified by a public notary’s enactment.

3. The agreement of a public company shall contain provisions on:

· the surname and the name ,citizenship and place of residence ,as well as the address of the founders or the trade name and the seat of the founders should they be legal entities;

· the trade name and the seat of the public company;

· the subject of work of the public company;

· the type and amount of the deposit of each founder and its value stimate;

· the manner of personal participation of each founder in the company work

· the manner of distributing the profit and covering of losses;

· the manner of managing and representing the public company ,decision-,making and

· otther issues prescribed by this law.

Special conditions for performing of activities

Art.51

A public company may perform activities related to a certain occupation should among the founders there be a person with the corresponding qualification,unless the law provides for all founders or majority of them to have the prescribed qualification for activitiy related to a certain occupation.

Entry into the trade register

Art.52

The public shall be entered into the trade register.The obligation concerning the application of the founding of a public company for entry into the register with the competent court shall burden all the founders of the public company authorized for representation.After the entry into the register,the founders must start performing the activities and employ workers.

Contents of the application for registration

Art.53

1. The application for entry of the public company into the trade register shall contain :

· the trade name and the seat of the company;

· subject of work of the company;

· personal name ,occupation and place of residence of each founder,citizenship,and the trade name and the seat for a legal entity;

· manner of managing and representation of the public company ,as well as decision making.

2. The application shall be accompanied by the agreement of the company.

3. The founders ,i.e. the persons who according to the law are authorized for representation shall deposit their signatures with the court.

4. Each change of facts form point 1 of this article ,as well as joining of a new founder shall be entered into the trade register.

Division two

LEGAL RELATIONS BETWEEN THE FOUNDERS OF THE

PUBLIC COMPANY

General provision

Art.54

1. To the legal relation between the founders of the public company the provisions of this division shall be applied,unless otherwise provided by the company agreement.

2. Unless otherwise provided by this law, company the regulations dealing with obligation relations shall be applied to the public company.

Deposits in the company

Art.55

1. The founders do not have to enter equal deposits into the public company .

2. The founder may enter money,objects ,rights ,labour and services into the public company.

3. The value of the non-money deposit shall be determined in monetary value upon the founders’ agreement.

4. The provisions of the company agreement regulating the interest or reward for the deposits shall be considered null and void.

Consequences form delay

Art.56

1. The founder who has failed to enter the money deposit on time or has failed to pay the money received for the public company in the cashier’s office on time or has pilfered money of the public company for himeself,shall be obliged to pay interest to the public company form the day that he had had to enter the deposit or to deliver the money or had pilfered it. A claim for compensation of damages is possible.

2. Should in cases of point 1 of this article be other objects and not money,the public company may demand compensation of damages.

Increase,supplementing and withdrawal of the deposit

Art.57

1. A founder of a public company shall not be obliged to increase his deposit above the amount prescribed by the company agreement,nor in case of a loss is he obliged to supplement it,should he not be responsible for the loss.

2. Withdrawal of the deposit may be requested by a founder only in case of cease of the founders relations in the public company.

Compensation of expenses and damages

Art.58

1. Should a founder of a public company make expenses according to the circumstances considered to be justified or should directly form the operation of the public company or due to that operation damages be inevitably done, the public company shall be obliged to cover the expenses and the damages to him.For the expenses and the damage done the public company shall pay interest counting form the day the expenses i.e. the damage had been done.

2. The founder may ask for advanced payment for the expenses necessary for performance of operations for the company.

Prohibiting of competition

Art.59

1. A founder of a public company must not ,without the other founders’ explicit consent ,undertake deals within the frame of the activities of the public company ,nor be a founder with personal liability,be a member of an organ or be employed in an enterprise being a competitor or could be a competitor to the public company.

2. Working form point 1 of this article shall be considered allowed if at the time the founder joined the public company the founders had been aware of that ,and had not been agreed for the founder to leave the work or to resign.

Consequences of prohibited competiiton

Art.60

1. Should the founder violate the prohibition form article 59 point 1 of this law,the public company may demand compensation of damages form him. The company may,insted of compensation of damages,demand for the founder to admit the deals concluded for his own account as deals concluded for the public company,i.e. deliver to the company what he had acquired form the deals concluded for other entity’s account or to transfer to it his right to what he’s supposed to acquire.

2. On carrying out the rights of the company form point 1 of this article,other founders shall decide. The companies’ claims shall expire in three months counting form the day the founders had acknowledged the violation of the rule form point 59 point 1 of this law. The claims shall expire in five years form the day the violation has been made regardless of the fact when the founders had acknowledged the violation.

3. Carrying out the rights form point 1 and 2 of this article shall not exclude the right of the other founders to demand termination of the company.

Transfer of a share

Art.61

1. A share in a public company may be transferred to third parties upon all founders’ approval.

2. The transfer of a share shall be made with a written deed.

3. The transfer of a share shall take effect for the public company once the transfer deed has been submitted to the public company and confirmed in writing by one of the persons authorized for managing of the public company.

4. The transfer of a share may be pointed out in fornt of third parties up to the date of its entry into the trade register.

Managing of a public company

Art.62

1. Every founder shall be authorized to manage the public company.

2. Should the founders agree for the managing of the public company to be entrusted to one or more founders,the rest of the founders shall be excluded form managing of the public company.

Realization of the entrusted managing

Art.63

1. The managers shall be authorized to act independently in the course of managing of the public company.Should a manager oppose an action before it has been carried out ,its performing shall be prevented until the founders reach a decision on it.

2. Should according to the company agreement all or some of the founders act jointly,then they shall reach thier decisions upon all managers’ approval.Each of the founders may carry out the urgent measures independently provided that damages to the public company are prevented by that. For the measures undertaken the manager shall immediately inform the other managers of the public company.

Transfer of the right to managing

Art.64

1. The founders may transfer the atuhorization for managing of a public company to a third party ,upon other founders’ consent ,in the manner prescribed by the company agreement.

2. The authorization for managing may not be transferred by the founder to a third party should the company agreement provide for so.

3. For the work of the manager form points 1 and 2 of this article ,the founder having transferred the managing shall be liable.

Scope of authorizations for managing

Art.65

1. An authorization for managing shall be made for issues form the framework of the usual operation of the public company.

2. For issues out form the framework of the usual operation of the public company,it shall be necessary for the decision to be reached by all founders no matter whether the company agreement had entrusted the managing to one or more founders or other persons.

3. Decisions exceeding the recognized authorizations of the managers shall be unanimously reached by the founders,unless otherwise provided by the company agreement. Should the company agreement stipulate for the decisions to be reached by majority of votes ,then each founder of the public company shall bear one vote ,unless otherwise provided by the company agreement.

4. The company agreement may stipulate for the decisions form point 3 of this article to be reached by written consultation should none of the founders require for the founders to be convened as assembly of founders. In case of a written consultation,the results shall be stated form the minutes signed by the managers. The minutes shall be accompanied by the answers to the questions placed by each of the founders.

Resigning form entrusted managing

Art.66

1. The founder may resign form the entrusted managing of the public company should there be an important reason for that.As an important reason shall be considered when he is prevented by the other founders form performing the entrusted managing or when he is prevented form it because of health condition.

2. The founder may resign form the entrusted managing of the company only upon a notice of resignation submitted to the other founders which would enable them undertake the necessary measures for managing,unless there is a reason giving him the right to resign prior to the expiry of the period of notice.

3. The period of notice form point 2 shall be 2 months at minimum.

Recall of the managers

Art.67

1. Should all founders be managers or if one or more managers have been appointed among the founders or appointed by the company agreement,the recalling shall be carried out upon an unanimous decision of the founders. The recalled founder may resign form the public company with a request for the rights arising form the founders relations in the public company to be paid to him.

2. Should one or more founders be founders and and have not been appointed by the company agreement,each fo them may be recalled under the conditions set forth in the company agreement or,should it not be the case,upon an unanimous decision of all the founders.

3. The manager not being a founder may be recalled under the condiitons set forth in the company agreement or,should it not be the case,upon a founders’ decision reached by majority of votes.

4. Should the recall be carried out for no grounded reason,it may serve as a basis for demanding compensation of damages.

The right to information

Art.68

1. The founders not being managers shall have the right to receiving a report on the state of the business books and enactments of the public company and to place written questions about the managing of the public company , which shall be answered in writing.

2. By application of the provisions form point 1 of this article the founders of the public company not being managers shall have the right to get familiar with the business books and the enactments themselves,in the seat of the company ,also with the contracts,correspondence ,minutes and all other documents created or received in the public company.

3. The right form point 2 of this article shall include the right to obtaining copies of the enactments and other documents.

4. In the course of exercising of the right form points 1,2 and 3 of this article the founder may use the help of an expert chosen by him form the list set forth by the registration court.

Decision-making

Art.69

1. The decision in the company shall be reached upon the consent of all founders which the managing has been entrusted to.

2. Should the company agreement provide for the decisions to be reached by majority of votes,in case of doubt the majority shall be calculated according to the number of founders.

The right to a reward

Art.70

The founder has the right to a reward for his personal participation in the work of the public company provided by the company agreement.

Participation in a profit and in losses

Art.71

The profit and the losses shall be distributed among the founders of the public company in proportion to the share of each founder in the company,unless otherwise provided by the company agreement.

Division three

THE RELATIONS OF THE PUBLIC COMPANY

WITH THIRD PARTIES

Agency

Art.72

1. Each founder shall be entitled to act as agents of the public company.

2. The founders may, by the company agreement ,authorize one or more founders for agency of the company. Should it be the case,the other founders shall be excluded form agency.

3. Should more founders be authorized to act as agents of the public company,each of the agents may represent the public company independently . The company agreement may also stipulate collective agency.

4. The agency of the public company depending on the fact whether their authorizations allow independent or collective agency shall sign documents for the company independently or collectively.

Resigning and depriving form agency

Art.73

1. The agent may resign form the agency authorization,within a period of at least three months form the date of its written information to the rest of the founders.Excluding or limiting of this right is null and void.

2. The registration court may,to the other founders’complaint and for important reasons,deprive the founder form the agency authorization. Each violation of an obligation of the founderor his incapability to act as an agent of the company.

3. The cease of the agency authorization toward third parties shall take effect on the day it has been entered into the trade register.

Personal liability of the founders

Art.74

1. For the obligations of the public company each founder shall be directly liable to the creditors of the public company with all his property and jointly with all other founders.

2. A provision of the company agreement opposed to point 1 of this article toward third parties shall be null and void.

3. The creditors of the public company may demand payment of the debt of the public company form the founders after they had unsuccessfully reminded the public company in a non-trial procedure and put in in delay

4. A founder joining an already existing public company shall also be liable for the obligations of the public company that had been made prior to his joining the public company.

Expiry of the outstandings

Art.75

1. Outstandings claimed to the founder for the obligations of the public company shall expire in five years after the public company has been terminated,i.e. after the founder has left form the public company ,unless the outstandings claimed to the public company expire in a shorter term ,according to this law.

2. The expiry shall count form the date the termination of the public company or leaving of the founder has been entered into the trade register. Should the public company cease to exist due to application of a liquidation procedure,the expiry shall count form the date the application of a liquidation procedure has been entered into the trade register.

3. Should the outstandings be claimed after the entry into the trade register according point 2 of this article,the expiry shall count form the date the outstandings had been claimed.

4. The provisions of points 1 and 2 of this article shall not be applied to expiry of an outstanding arisen form relations between the founders or between the founders and the public company.

Cease of expiry of otstandings

Art.76

1. The cease of expiry of outstandings toward the terminated company shall be effective toward the founders belonging to the company at the time of the cease.

2. The cease of expiry of oustandings toward the public company not terminated yet shall not be effective to the founder that had left,and the cease of expiry effective to a particular founder shall not be valid for the other founders.

Division four

TERMINATION OF THE PUBLIC COMPANY

AND TERMINATION OF THE FOUNDERS RELATIONS

Reasons for termination

Art.78

1. The public company shall be terminated on the following cases:

· once the term it has been established for expires;

· upon a founders’ decision;

· upon application of a bankruptcy procedure to the public company;

· in case of death of any of the founders,i.e. upon cease of a founder-legal entity,unless otherwise stipulated for by the company agreement;

· upon application of a liquidation procedure over any of the founders;

· resignation of any of the founders of the public company

· upon a valid court decision and

· in other cases prescribed by law and by the company agreement.

Resignation of a founder

Art.78

1. Should the company be established for an indefinite period of time,the founder may cancell the company agreement upon a period of notice of six months,counting form the end of the business year. The resignation must be submitted to each of the founders.The period of notice may be extended by the company agreement. Other excusiosn and limitations shall be considered null and void.

2. The provisions form point 1 of this article shall be applied also to the public company which according to the company agreement is valid for the lifetime of each of the founders or has been silently extended for the period after the validity term.

Termination upon court’s decision

Art.79

1. For significant reasons the court may, at the complaint of a founder of the public company ,decide on termination of the company prior to the expiry of the validity term,i.e. without a resignation,should the validity term not be determined.

2. As significant reason form point 1 of this article shall be the case when a founder violates an important obligation deliberately or out of negligence,should the fulfillment of such obligation or achieving of the aim become impossible or should the aim be achieved.

3. The provision of the company agreement excluding or limiting the founders’ right to demanding termination of the public company according to points 1 and 2 of this article shall be null and void.

4. A complaint shall be submitted against other founders.

5. At a request of a founder,the court may,instead of deciding on termination of the company, expel the gulity founder.

Resignation for serious violation or inappropriate behaviour

Art.80

Each founder may resign form the founders relation in the public company without a period of notice should any of the founders of the public company seriously violate the company agreement or his behaviour endanger the further cooperation with him or achieving of the aim of the public company.

Protection of a founder’s creditor

Art.81

1. A founder’s creditor,which within six months fails to settle its outstandings within the procedure of forced effectuating of the movvable property of the founder,may demand seizure of the liquidation part of the founder-debtor and upon written information to all other founders within the following six months ,demand termination of the public company ,unless otherwise stipulated for by the company agreement.

2. The public company shall not cease to exist should the company or other founders settle the debt after the seizure order form point 1 of this article has been made.

3. Should the company or the other founders in the public company settle the debt ,the participation of the founder shall cease,unless otherwise decided upon by the founders.

Prolongation of validity of a company after cease of a founder

Art.82

1. The company agreement may stipulate for the public company to continue to exist after the founders relation of any of the founders ceases. In that case the other founders shall pay for the rights of the share of the founder which has left the public company,and in case of death of a founder in the public company,the successors shall acquire the status of founders should they wish so.The successors shall make the statement of acquiring the status of a founder in the public company within three months form the day they had been pronounced successors.

2. Should the successors refuse to become founders,as well as in case of termination of the founders relations,the public company shall pay for the rights of the successor’s share or of the share for which the founders relation has ceased.

Undertaking of a company without a liquidation

Art.83

1. If the public company consists of only two founders,and in one of them reasons for termination of the founders relations appear,the court may authorize the second founder ,at his requiest,to undertake the public company without liquidation,with the assets and liabilities.

2. Should a bankruptcy procedure be applied to a founder,the other founder shall be entitled to undertake the public company without liquidation,with the assets and liabilities.

Entry of the termination into the trade register

Art.84

1. The founders shall aplly for entry of the termination into the trade register,unless the public company ceases due to application of bankruptcy procedures.

2. All founders shall apply for entry into the trade register also when the founders relation of a founder of the public company ceases.

Head two

LIMITED PARTNERSHIP COMPANY

Division one

GENERAL PROVISIONS

The concept of a limited partnership company

Art.85

1. A limited partnership company shall be a company in which two or more entities enter into partnership ,where one of the founders has a joint several and unlimited liability for the obligations of the company with its entire property (hereinafter : complementary partner) while at least one founder is liable for the obligations of the company up to the amount of the its assets entered into the company (hereinafter : dormant partner).

2. The dormant partners shall participate with at least one-fifth in the total amount of deposits.

Application of the provisions for the public company

Art.86

Unless otherwise provided by the provisions of this head,the provisions regulating the public company shall be applied to the limited partnership company.

Division two

FOUNDING AND ENTRY INTO THE TRADE REGISTER

Company agreement

Art.87

The limited partnership company shall be founded upon a company agreement. The company agreement shall be concluded in writing .The signatures shall be verified by a public notary.

Contents of the agreement

Art.88

The company agreement shall contain provisions on :

· limited partnership company trade name and seat ;

· subject of work of the limited partnership company;

· name and the place of residence ,i.e. the trade name and the seat,citizenship,as well as the founders’ address;

· total amount of the founders’ deposits;

· type and ratio of the deposits of each of the founders;

· manner and term of payment of deposits;

· distribution of profit and covering of losses;

· managing and agency of the limited partnership company ,decision-making;

· other provisions regulating the relations between the founders.

Trade name

Art.89

1. The trade name of the limited partnership company shall contain the surname and name ,i.e. the trade name or the abbreviated trade name of at least one of the complementary partners,and the designation “and others” should there be more of them, as well as the words “limited partnership company” or the abbreviation “lpc”.

2.The surname and the name of the dormant partner shall not be entered into the trade name.

3. The dormant partner shall be liable as a complementary partner should his surname and name be included into the limited partnership company trade name.

Entry into the trade register

Art.90

1. The application for entry of the limited partnership company into the trade register shall be submitted by the complementary partners.

2. The publishing of the entry of the limited partnership company into the trade register by the court,except for the prescribed deta,may comprise only the appointing of the number of complementary partners and the total amount of thier deposits.The name of the dormant partners may not be published without their approval.

3. The provisions form point 2 of this article shall be applied when the dormant partner joins an exisiting company,i.e. leaves the limited partnership company,also when the type of deposit is changed or the amount up to which the dortmant partner is liable.

Division three

LEGAL RELATIONS BETWEEN THE FOUNDERS

Rights and liabilities between the founders

Art.91

1. The rights and the liabilities shall be regulated by the company agreement.

2. Should the company agreement regulate particular issues,the provisions of this law for the public company shall be applied,unless otherwise stipulated for by this division.

The obligation of personal participation

Art.92

1. Only the complementary partner shall be obliged to personal participation in the company work.

2. The company agreement may provide for the dormant partner to be obliged to personal participation.

3. A reward for personal participation in the work of the limited partnership company shall belong also to the dormant partner form point 2 of this article.

Managing

Art.93

1. The complementary partners shall manage the limited partnership company.The dormant partners shall not have the right to managing the company.

2. A dormant partner may not oppose the decisions not the acts of the complementary partners,except for decisions and acts reached or undertaken out of the framework of the regular operation of the limited partnership company.

Application of the provisions on compensation of expenses

and damages, and prohibition of competition

of the complementary partner

Art.94

The provisions form articles 58 and 59 of this law shall be applied to the complementary partner,unless otherwise provided by the company agreement.

The right to information

Art.95

The dormant partner has the right to be informed about the contents of the business books of the limited partnership company and the documents,as well as to place questions in writing concerning the managing the limited partnership company ,which are to be answered in writing.

Transfer of deposits

Art.96

1. The deposits in the limited partnership company may be transferred to a third party upon all founders’ consent.

2. The company agreement may stipulate for;

· the dormant partners’ deposits to be freely transferred among the founders;

· the dormant partners’ deposits to the renounced to third parties upon the approval of all complementary partners and the majority of dormant partners,in accordance with their number and the amount of thier deposit and

· the complementary partner to renounce part of its desposit to a complementary partner or to a third party upon the approval of all complementary partners and majority of dormant partners,according to thier number and the amount of their deposit.

Change of seat

Art.97

1. The founders may change the seat of the limited partnership company upon an unanimous decision.

2. Other changes and ammendments to the company agreement shall be carried out upon the consent of all complementary partners and majority of dormant partners,according to the number and amount of their deposit.

Participation in distribution of profit

and covering of losses of a dormant partner

Art.98

1. The dormant partner shall participate in distribution of the profit of the limited partnership company in proportion to its deposit.

2. The dormant partner shall participate in covering of losses of the limited partnership company up to theamount of his deposit. The dormant partner shall not be obliged to pay back the received profit due to later loss of the limited partnership company.

Prevention of distribution of profit

Should the limited partnership company suffer constant losses in the course of its work which affect the paid deposit,up to establishing of the prescribed amount profit shall not be distributed.

Division four

LEGAL RELATIONS OF A LIMITED PARTNERSHIP

COMPANY WITH THIRD PARTIES

Agency

Art.100

1. A dormant partner may not act as an agent of a limited partnership company. Unless otherwise stipulated by the company agreement,such provision shall be null and void.

2. A dormant partner may not act as an agent of the limited partnership company even with an authorization.

3. Should a dormant partner act in opposition of points 1 and 2 of this article,it shall have a joint and several liability for the obligations of the limited partnership company arisen form the forbidden activities. The scope of responsibility shall be determined according to the number and the effect of the forbidden activities.

Liability of the dormant partner

Art.101

1. The dormant partner shall not be liable for the obligations of the limited partnership company should he pay the entire deposit he has undertaken by the company agreement.Should the dormant partner fail to pay the entire deposit he has undertaken by the company agreement,he shall have joint several and direct liability with the other founders up to the amount of the agreed deposit reduced by the paid share.

2. Should the dormant partner according to the agreement with the other founders of the limited partnership company reduce the amount of his deposit,up to the entry of the new deposit into the trade register he shall be liable toward thisrd parties up to the initial amount of the deposit.

3. A party acquiring the status of a dormant partner,shall be liable also for the obligations of the company it has undertaken prior to his joining the company.

Division five

TERMINATION OF A LIMITED PARTNERSHIP COMPANY

Conditions for termination of the company

Art.102

A limited partnership company shall be terminated should:

· all complementary partners leave it;

· bankruptcy procedure be applied to a complementary partner;

· a complementary partner lose its working ability;

· a dead complementary partner that had been the only complementary partner with all successors being juvenile ones can not be substituted by a new complementary partner nor the limited partnership company can be transformed into a limited liability company;

· upon a court’s decision;

· in other cases provided by law and the company agreement.

Death or cease of a dormant partner

Art.103

1. A limited partnership company does not cease to exist upon death of a dormant partner i.e.upon cease of a dormant partner not being a physical person.

2. Should due to leaving the limited partnership company by all dormant partners only the complementary partners remain,the limited partnership company shall proceed with its work as a public company.

3. The change form point 2 of this article shall be registered into the trade register within 30 days form the leave of the last dormant partner.

4. Should the limited partnership company fail to obey the term form point 3 of this article ,the company shall cease to exist.

Successor of a complementary partner

and transformation of the company

Art.104

1. Should the company agreement stipulate for the limited partnership company operation even in case of death of one of the complementary partners to continue its operation throuhg its successor being a juvenile one,he shall have the status of a dormant partner up to majority.

2. In case the dead complementary partner had been the only complementary partner and all its successors are juvenile ones ,the dead complementary partner may be substituted by a new complementary partner and the limited partnership company may be transformed into a limited liability company form the day of death of the complementary partner.

Bankruptcy procedure over a complementary partner

Art.105

1. Should a bankruptcy procedure be applied to a complementary partner or should he lose his business capability,the limited partnership company shall cease to exist.

2. As an exception form point 2 of this article the limited partnership company shall continue its operation with the complementary partners to which a bankruptcy procedure has not been applied i.e. which have not lost the business capability ,should the continuation be provided by the company agreement or upon an unanimous decision of the founders.

LIMITED LIABILITY COMPANY

Part one

FOUNDING

Art.106

1. A limited liability company shall be the company where each founder shall participate with a certain deposit (basic deposit) in the predetermined basic capital assets.

2. The basic deposits do not have to be equal.

3. For the obligatiions of the limited liability company ,the founders shall not be liable.

Number of founders in the Company

Art.107

1. A limited liability company may be founded by one person considered as a single founder.

2. The Company may have maximum 50 founders.

Obligations of the founders toward the Company

Art.108

The founders shall be obliged toward the Company by fulfilling other obligations stipulated by the Company Agreement.

Trade name of the Company

Art.109

1. The trade name of the Company shall contain a designation on the activity of the Company ,the names of all or some of the founders or the name of one founder ,after which the words “ limited liability company “ shall follow ,or the abbreviation “ltd”.

2. If the Company is established by one person ,the trade name shall contain the words “ sole founder limited liability company” or the abbreviation “sfltd”.

Company Agreement

Art.111

1. The limited liability company is established with a Company Agreement concluded by all the founders in written form.

2. If the company is founded by one person,the Company Agreement is replaced for a statement of the founder of the limited liability company verified by a notary public.

3. The founders conclude the Agreement from point 1 of this article personally or through an authorized person having an authorization verified by a notary. An authorization is not required if the representative of the founder is athorized by law to conclude the Company Agreement for the founder or to make a statement required for founding of the Company.

4. Successive founding of a limited liability company is not allowed.

Contents of the Agreement ,i.e.of the statement

Art.111

1. The Agreement,i.e.the statement shall stipulate the following in particular:

· the names,the place of residence,citizenship as well as the address of the founders,i.e.trade name and seat if the founder is a legal entity;

· line of business of the Company;

· the duration of the Company;

· the amount of the capital assets and the amount of each founder’s basic deposit ,if the basic deposit consists in objects and rights ,they shall be described in details and their value shall be determined.

· method and term of payment of the money deposits entered in full;

· methods and criteria for distributing of the profit and covering of losses;

· managing of the Company

· rights and liabilities of the founders beside the obligation of payment of a basic deposit

· agency and representation of the Company.

2. Beside the issues listed in point 1 of this Article,the Company Agreement may regulate other issues and relations.

3. If the Company Agreement contains provisions contrary to this law,they are null and void.

Basic Capital Assets of the Company

Art.112

1. The basic capital assets fo the Company is a set of the basic deposits of the founders.

2. The capital assets is expressed in denars or in foreign currency in denar counter value ,according to the medium exchange rate of the National Bank of Macedonia announced on the day of signing of the Company Agreement.

3. The basic capital assets shall be at minimum 10.000,00 DEM in denar countervalue according to the medium exchange rate of the National Bank of Macedonia announced on the date of submitting of the registration documents for founding of the Company, i.e submitting of the documents for registration of the change of the capital assets amount in the trade register.The amount of the basic capital assets must be expressed with a whole number and be divisible by 100.

A decision on raise of a reduced basic capital assets amount

Art.113

1. Should the basic assets amount be reduced for any reason below the amount determined in Art.112 of this Law, it shall have to be raised up to the amount provided by this Law within one year ,unless the limited liability company has been transformed into a company of another type.

1. Should the basic capital assets not be raised up to the determined amount in point 1 of this Article within the stipulated term ,each person having legal interest may require termination of the limited liability company after he has warned his representatives to coordinate such situation with the law.If the situation stops from the day the court has reached a first-degree decision ,the procedure is stopped.

Amount of the basic deposits of the founders

Art.114

1. The amount of the founders’ basic deposits may not be equal,but the amount of each separate basic deposit may not be less than 200,00 DEM in countervalue.The basic deposit is expressed in denars in a way provided in Art.112 point 3 of this Law and has to be expressed with a whole number divisible by 100.

1. Each founder while establishing of the Company has a right to one basic deposit. One basic deposit may be owned by more persons.

Payment of the basic deposit with legal payment facilities

Art.115

The basic deposit which is not paid with legal payment facilities is allowed only if stipulated by the Company Agreement.

Basic deposits in objects

Art.116

1. Should the basic deposit consist of objects that are undertaken by the limited liability company,the Company Agreement shall specify the founder entering the objects ,as well as the objects to be undertaken,the value at which the Company undertakes them and privileges given to the founder entering the objects if the founders agree upon.

2. There shall be a report on the value of the objects made by an official appraiser which shall be attched to the Company Agreement.The appraiser shall be appointed by the future founders from the list of appraisers determined by the court.

3. The appraiser is entitled to a recompensation for the service and covering of the expenses.

Determining of the value of the basic deposits in objects

Art.117

1. Should the value of a deposit in objects and rights be below 50.000,00 DEM in denar countervalue and if the total value of the whole - objects and rights does not exceed the half of the basic capital amount,the future founders may unanimously decide not to appraise the value of the deposit in objects and rights. In that case the founders prior to submitting documents for registration make a report on the deposits in objects stating that the value of the deposit in objects or rights is not less than the amount of the undertaken basic deposit.

2 If the value of the deposit in objects ,i.e. rights is not determined by an official appraiser or if in the Agreement the expressed value is not equal to the value determined by the appraiser ,the founders have joint and several liability to third parties within five years from the day of registration of the founding of the Company in the trade register,for the value of the deposit in objects and rights determined at the moment of establishing of the limited liability company.

Registration of the basic deposits

Art.118

1. Inviting founders by a public invitation and entering basic deposits in personal labour and rendering of services is contrary to this Law.

2...The basic deposits are registered as a whole.

Payment and entering of the basic deposits

Art.119

1. Each founder at the time of founding of the Company shall pay one third of the deposits he pays in money,so that the total value of all payments in money and the value of the entered objects and rights should not be below 5.000,00 DEM in denar countervalue.

2... The deposits in objects and rights shall be entered in full prior to submittting the documents for registration of foundation of the limited liability company in the trade register. If the value of the deposits in objects does not reach the value of the undertaken basic deposit , the founder shall make an extra payment of the balance in money.

3. Payment fo the basic deposit shall be made on a temporary account of

the limited liability company at an istitution for payment operations.

4. The payments from point 1 of this Article as well as the full entering of the deposit in objects and rights shall be of the nature allowing the limited liability company a free and lasting disposal from the moment of their registration in the trade register.

Compensation and privileges for objects and rights the founder transferres to the Company

Art.120

If a founder of the Company is given compensation for the objects and rights he transferres to the Company and that value is added to his basic deposit or if any founder is given special privileges in the Company,in the Company Agreement such founder is cited ,as well as description of the objects and rights ,their value expressed in monetary value and the privileges that the founder aquires .

Settling of expenses for founding of the Company

Art.121

1. The founders provide assets for settling of the expenses for founding of the Company commensurate with the amount of their basic deposits.

2. The founders may decide for the expenses for founding of the limited liability company to be reimbursed to them or, reward for participation in founding of the Company to be paid to one or more founders.

3. The expenses and the rewards from point 2 of this Article may be paid from the profit only.The founders may decide for the payments for thar purpose to be made before payment of the dividend to the founders.

Conditions under which the basic deposits may be

reimbursed to the founders

Art. 122

1. If the limited liablity company is not established within 6 months counting from the day of payment of the first basic deposit in a way set forth in the Company Agreement,a founder may require for the court to determine his right to reimbursement of his deposit.

2. If founders decide upon founding of the limited liability company after the decision of point 1 of this Article,a new procedure for entering of deposits is carried out.

Limitations for founding of a limited liability company by a

physical person

Art.123

1. A physical person may not be a sole founder in more than one limited liability company.A single founder company may not be a sole founder in another limited liability company.

2. In case of nonobservance of the provisions of point 1 of this Article,a person having legal interest may require termination of the limited liability company from the registering court . If the nonregularity arises from uniting into one person of all shares in a company with more founders, the demand for termination may be submitted only after expiry of one year from the day of undertaking of all shares by one person.

3. The court may determine a six month term for reconciliation of the situation according to the Law and will not make a decision on termination of the limited liability company if the situation has been reconciled on the day of deciding.

Liability of the first managing bodies

Art. 124

1. The first managing bodies of the limited liability company and the founders proven responsible for the annulment of the activities undertaken in the founding procedure have joint and several liability to third parties and the other founders for the damage caused by the annulment.

2. The claim is submitted within three years from the day when the decision on termination went into effect.

Application for registration of founding of a Company

Art.125

The application for registration of founding of a Company in the trade register is signed by the manager,i.e. all managers of the Company.

Enclosures to the Application for Registration

Art.126

1. To the application for registration of the limited liability company,the following documents shall be enclosed:

· the Company Agreement;

· the enactment for appointing of a manager or managers of the Company;

· a proof that each founder has paid at least one third of the basic deposit in money;

· a proof that at least one half of the basic capital assets has been paid.

2. If at the time of founding of the limited liability company the whole amount of the money deposit has not been paid,the rest of the amount shall be paid in a way set forth in the Company Agreement. The rest of the amount should be paid within one year.

3. The Company Agreement must not set forth provisions contrary to point 2 of this Article.

4. The court may reject the application for registration if the official appraiser of the value of the deposit in objects and rights establishes the fact ,or it is obvious ,that the report of the founders from point 1 of Article 117 of this Law is irregular or opposite to the law or if the appraiser states or the court establishes the fact that the value of the deposit in objects is lower at least for one third of the amount of the entered basic deposit.

Liability of the founders and managers for damage

Art.127

1. The founders and the managers have joint and several liability to the limited liabilitiy company for damage caused due to premediation or negligence, or non-entering or irregular entering of deposits in objects ,due to unreal evaluation of those deposits or any other disadvantegeous effects in the founding procedure.

2. If covering of the damage is necessary for fulfilling of the obligation towards third parties,the limited liability company can not cancell the claim for paying damages from point 1 of this Article nor can bargain in respect to that claim.

3. Expiration of the claim from point 1 of this Article starts from the day of entry of the limited liability company into the trade register.

4. The claim for paying damages from point 1 of this Article expires in 5 years from the day of entry of the llimited liability company into the trade register.

5. For the damage of point 1 of this Article ,the person for whose account the founder has undertaken the deposits is also liable.

6. The person from point 1 of this Article may not refer to the founder not being familiar with the circumstances he has been familiar with or had to be familiar with ,acting in his name or has acted with attention of a neat and coscientious businessman.

Part two

RIGHTS AND LIABILITIES OF THE FOUNDERS

Liabilities of the founders

1. The founder is obliged to pay the undertaken deposit in full in accordance with the Company Agreement and the decision of the Assembly of the Founders.

2. Untill otherwise provided by the Company Agreement and the decision of the Assembly of the founders,all founders make payment of the basic money deposits in proportion to their basic deposits.

3. The founders cannot be exempt from ,nor the fulfillment of the obligation of payment of a money deposit can be postponed.The obligation for payment of money deposit may not be cleared with his claims toward the limited liability company.

Obligation for payment of deffault interest

Art.129

1. In case of delay in payment within an additional term of 30 days ,the founder shall be reminded to fulfill his obligation.The reminder sent by the manager or the managers of the Company he is advised that if after the expiration of the additional term payment has not been made, expelling would follow.

2. A founder who will not pay the amount of his basic deposit within the term determined by the Company Agreement i.e. the decision of the Assembly of the founders,is obliged to pay the deposit with the deffault interest determined by law ,if the Company Agreement i.e. the decision of the Assembly of the founders does not determine higher interest.

Expelling of a Founder

Art. 130

1. If a founder misses the additional term , he is expelled by the limited liablity company .He is informed about the expelling in written form.

2. A founder whose founders relation has stopped by expelling is liable for the damage caused by the non-payment of the deposit.

Sale of the share of an expelled founder

Art.131

1. The share of an expelled founder shall be sold at public competition.The share may be transformed into money in other way upon the expelled founder’s consent.

2. The expenses for the sale,the deffault interest,the due obligations on the non-paid share of the basic deposit are settled from the sale price ,and the rest belongs to the expelled founder.

Withdrawal,i.e. payment of a deposit by other founders

Art.132

1. When in compliance with Art.131 provisions of this Law transformation of a deposit into money is not possible,the Company may withdraw the share or the other founders of the Company may ,in proportion to their basic deposits ,pay the whole basic share of the expelled founder ,and in proportion with the amounts paid in such manner ,their basic deposits shall be raised.

2. In case of withdrawal of a share and payment of the basic deposit by the other founders,the expelled founder has a right to the share of his basic deposit he has paid for.

Rights of the founder in the Company

Art.133

Each founder has the right to participate in managing of the limited liability company and in distributing the profit ,and to be informed about the work of the Company,to have access to the books and the enactments of the Company,as well to a part of the rest of the liquidation,.i.e. bankruptcy assets.

Rights to a share of profit

Art.134

1. The founders have the right to participation in distributing the profit established in the balance of success unless otherwise provided for in the Company Agreement.

2. The profit is distributed to the founders according to their share in the basic capital assets unless otherwise provided for by the Company Agreement.

Secondary activities

Art.135

1. Beside payment of the basic deposit,the founders may undertake an obligation to carry out other activities concerning property issues. (secondary activities).

2. As secondary activity is considered the personal participation of the founders in the Company work except for the participation as elected officials.

3. A founder is entitled to a special award which in the balance sheet is expressed as debt of the Company.

Supplementary payments

Art.136

1. The assembly of the founders may decide for the fouders to make supplementary payments.

2. The Company Agreement may stipulate for all or some founders to make supplementary payments above the amount of the basic deposit

3. A founder can not clear his claims to the company by supplementary payment.

4. The obligation for supplementary payments must be determined for a definite period of time and the amount should be in proportion with the undertaken basic deposits.

5. A provision of the Company Agreement about supplementary payments which is opposed to the article is null and void.

6. A founder obliged to make supplementary payments has a right to vote.

Reimbursement of supplementary payments

Art.137

1. Unless otherwise provided by the Company Agreement,the supplementary payments may be reimbursed to the founders that made them in proportion with the undertaken basic deposits.

2. Reimbursement of the supplementary payments shall be made after expiration of a three-month period of time in which the Company has reached the decision on reimbursement.

3. The decision on reimbursement of the supplementary payments is announced three times in intervals not shorter than one and not longer that two weeks.

Keeping of the basic capital assets

Art.138

1. The property of the limited liability company required for keeping of the basic capital assets must not be paid to a founder.

2. A founder can not claim repayment of the basic deposit within the period of durability of the Company unless otherwise provided by this Law.

3. Supplementary payments which do not serve for covering of the basic capital assets in case of losses may be repaid to the founder. Repayment may not be made prior to the expiration of 3 months counting from the date when a decision on repayment has been announced in a proper way. In case of supplementary payments prior to full payment of the deposit,repayment of the supplementary payments made before full payment of the deposit is null.

Loan of the founder

Art. 139

1. The loan that the founder grants to the Company when it cannot provide one at customary market conditions is treated as property of the Company.

2. The provisions from point 1 of this Article are applied to other legal activities of the founder of the Company as well as to third persons which in the spirit of legal affairs refer to the loan.

Determining of the amount of the loan

Art.140

1. The share of a founder in a limited liability company is determined in accordance to the amount of the basic deposit undertaken by the founder,unless otherwise provided for by the Company Agreement.

2. The founder may have only one share in the Company. If the founder undertakes another share ,his share is increased for the amount of the undertaken share.

Ownership of a share

Art.141

1. A share may be owned by more than one founder.

2. Persons from point 1 of this Article are considered one founder ,and they can execute their rights only through a joint representative ,and have joint and several liability for the obligations of the founder.

Certificate of a share

Art.142

1. The cerificate of a share issued to a founder in a limited liability company shall not have the status of securities.

2. The Company may issue documents and the payment of the annual profit shall depend on submitting of such documents.

Register of shares

Art.143

1. The manager,i.e. the managers of the limited liability company shall keep a register of shares in which,after the entry of the Company in the trade register,the following data is entered : name and surname (trade name),occupation and place of residence (the seat) of each founder ,the amount of the basic deposit undertaken by the founder,supplementary payments made by the founder ,as well as special rights and liabilities if related to the share.

2. The register of shares shall ,without delay, note all changes in respect to the entries made ,as well as the division and burdening of the share.Expelling,change of ownership of a share in relation to transforming of a share into money,and aquiring new basic deposits ,decrease of the basic deposits and reimbursement of the supplementary deposits are registered by the managers without delay and without an application,while other changes ,burdenings and divisions only upon an application sbmitted by any of the founders.

3. Anyone having legal interest may have access to the register of shares in working hours. If the Company denies the existance of legal interest ,the issue shall be solved by the registering court in non-trial procedure.

Validity of the register of shares

Art.144

1. In relation to the limited liability company a party is considered a founder only if registered in the register of shares.

2. The registration in the register of shares is considered completed on the day when the Company receives the application for registration ,if it complies with the conditions stipulated for such registration ,regardless of the time of the actual registration.

Disposal of the share

Art.145.

1. The shares in the limited liability company are transferrable and are subject to succession in a way stipulated for by the Company Agreement.

2. A share binding for secondary activities may be transferred upon the Company’s approval.

3. The founders may mortgage their shares.

Conditions under which a share is transferred to third party

Art.146

1. A share may be transferred to third parties provided that the founder has paid for his basic deposit in full.

2. The right to priority purchase of a share is executed to the following order :other founders,the limited liability company and the person appointed by the Company.

3. The limited liability company may purchase a share only from the property exceeding the basic capital assets.

4. If a founder, the limited liability company or the person appointed by the company do not decide within one month from the day of announcement of sale of the share,the founder may freely dispose of his share ,unless special conditions are stipulated by the Company Agreement.

5. If the approval of the limited liability company is a condition for the transfer , and the company does give approval to the founder who has paid the basic deposit, the registering court may, at the founder’s request allow the transfer in a non-trial procedure.

Right to priority purchase of shares

Art.147

In case of sale of a share in an executive court procedure,the right to priority purchase of the share is exercised in the following order : the other founders,the limited liability company,i.e. the person appointed by the Company.

Passing of the rights and liabilities of the founder to the

person acquiring the share

Art.148

1. In case of transfer of a share the rights and liabilities of the founder are transferred to the person who has acquired the share.

2. The person who has acquired the share has a joint and several liability with the predecessor for the obligations existing at the moment of transferring of the share in proportion to the share of the basic deposit determining the share in the basic capital assets of the Company.

3. The liability of the point 2 of this Article expires in 5 years from the date of submission of the application for registration in the trade register.

Application for change of ownership of a share

Art.149

1. A person having acquired a share is obliged to submit to the Company an application for change of ownership of the share for the purpose of registering in the register of shares.The application shall contain a statement that the person having acquired the share accepts the provisions of the Company Agreement.

Transfer of a share by succession