Joint Stock Company (Shoqëri Aksionare - JSC) in Kosovo

Joint Stock Company (Shoqëri Aksionare - JSC)In Kosovo, a Joint Stock Company (JSC) is a business model used for large-scale commercial activities and to establish a publicly traded capital structure. This structure facilitates significant investments and financing methods such as public offerings.

1. Key Features

• Legal Status: A JSC is a legal entity operating independently of its shareholders.

• Liability: Shareholders’ liability is limited to the value of their shares.

• Capital Structure: The company’s capital is divided into shares, which can be transferred.

• Management Structure: Managed by a general assembly and a board of directors.

• Public Access: Can issue shares to the public and participate in stock exchange activities.

2. Advantages

• Limited Liability: Shareholders only bear risk up to the value of their investment.

• Capital Raising: Offers diverse financing options through public share issuance or private investors.

• Corporate Governance: Mechanisms such as the board of directors and general assembly ensure professional governance.

• Ease of Transfer: Shares can be easily transferred, bought, or sold.

3. Disadvantages

• Complex Management: Requirements for a board of directors, general assembly, and public disclosure can complicate management processes.

• Higher Costs: Establishment and operational costs are higher compared to other company types.

• Reporting Obligations: Stricter financial reporting and audit requirements apply.

4. Establishment Process

A. Required Documents

1. Articles of Incorporation:

   • Should include the company name, address, business activity, capital structure, and share distribution details.

2. Capital Commitments:

   • Proof of the capital committed by shareholders.

3. List of Board and Audit Committee Members:

   • Identification details of the board of directors and audit committee members.

4. Proof of Address:

   • Lease agreement or deed for the company’s address.

B. Application Process

1. Name Registration:

   • The company name must include the term "Shoqëri Aksionare" or "Sh.A."

   • The name must be registered with the Kosovo Business Registration Agency (ARBK).

2. Submission of Application:

   • The required documents should be submitted to ARBK in person or through online systems.

3. Registration Fees:

   • Applicable registration fees must be paid.

C. Unique Business Identification Number (BIN)

• Once registration is complete, the company is assigned a Unique Business Identification Number (BIN).

5. Operation and Management

A. General Assembly

• The General Assembly is the supreme decision-making body involving all shareholders.

• Annual meetings are held to discuss key issues such as company strategy and profit distribution.

B. Board of Directors

• Responsible for the daily management of the company.

• Board members are elected by the shareholders.

C. Audit Committee

• Oversees financial statements and general activities of the company.

• Ensures transparency and accountability.

D. Shareholders’ Rights

• Shareholders have voting and profit-sharing rights.

• Voting rights are typically proportional to the number of shares owned.

6. Legal Basis

• Article 101: Nature and Management of a JSC.

• Article 106: Rights and Responsibilities of Shareholders.

• Article 108: Appointment of the Board of Directors and Audit Committee.

• Article 120: Profit Distribution and Capital Increase.

• These provisions are regulated under the Kosovo Law on Business Organizations (Law No. 06/L-016).

7. Post-Establishment Obligations

A. Tax Registration

• The company must register with the Kosovo Tax Administration and file regular tax returns.

B. Public Disclosure Requirements

• If the company is publicly listed, share issuance processes must comply with the Kosovo Stock Exchange and regulatory authorities.

C. Financial Reporting

• The company must prepare annual financial reports and undergo independent audits.

D. Updates and Notifications

• Changes in the board of directors or audit committee must be reported to ARBK.

8. Example Scenario

Investors planning to establish a construction company might choose the JSC structure. The company can meet large capital requirements by going public or attracting private investors. The board of directors would oversee large-scale projects, while the audit committee ensures transparency in operations.

Conclusion

A Joint Stock Company is an ideal business model for large-scale commercial ventures that require capital raising and investor participation. Its features, such as corporate governance, public access, and professional management, make it a standout choice. However, its complex management structure and high operational costs must be considered.