LAW FOR TRANSFORMATION OF SOCIALLY OWNED ENTERPRISES

 

1. GENERAL PROVISIONS

 

Article 1

This Law regulates the conditions, manners and procedures under which enterprises with social capital (hereinafter: enterprises) are transformed into enterprises where the owner is defined.

The transformation of enterprises, as per Para. 1. of this Article, is executed by reorganizing the enterprise into a shareholders company or a company with limited liability in private ownership i.e. with a defined owner, under the conditions and procedure prescribed by this Law as well as by the Law of Enterprises (hereinafter: transformation). Also, the transformation can be performed by sale of social capital or sale of all assets of enterprise.

When in the transformation, in accordance to this Law as a purchase of shares of stocks of a company or a part thereof, a foreign person takes part, the Law of Foreign Investment should be implemented.

 

Article 2

Companies with social capital under this Law, are also socially owned enterprises and enterprises with mixed ownership, in which, on the basis of the assets invested, there are no ownership rights over the enterprise.

In terms of this Law, the organizations of associated labor and business associations performing economic activity, that are not yet organized as enterprises are also considered as enterprises with social capital.

 

Article 3

Transformation, in accordance with this Law, is not executed in:

a) enterprises and organizations, which by the Law, and according to a decision based upon a Law are founded to conduct activities of special national interest or public services or have a status of public enterprises.

b)enterprise and other legal entities economizing with waters, forests, lands and other public goods, apartments and business premises;

c)socially owned enterprises dealing with hazard games and;

d)enterprises or part of the enterprises which have been designated as monopolies, according to the Law, except parts i.e. associations founded by them that are not designated as monopolies.

The transformation of the enterprises, the organizations i.e. the public service referred in Para. 1 of this Article, banks and other financial institution, insurance companies and cooperatives will be regulated by another Law.

If enterprises referred to in Para. 1, point(a) of this Article, change their status the same may be transformed in accordance with this Law.

Article 4

In the transformation procedure, the physical and legal entities can not acquire ownership rights over natural resources of the Republic of Macedonia, the flora and fauna, the public assets, the cultural and historical monuments which by Law are of public interest for the Republic, and are under special protection.

The conditions and the manner of utilization of the public assets, the cultural and the historical objects and buildings, are regulated by Law.

 

Article 5

The enterprises declaring loss in operation may apply transformation accordance with the provisions of this Law, if they cover the loss under conditions determined by Law; except if the cover of the loss is executed by reduction of the value of the social capital.

The enterprises that commenced bankruptcy proceeding, may perform transformation, only according to the manner and the conditions prescribed by this Law.

The enterprises performing economic activity regarding professional training and employment of disable persons, enterprises for employment of disable persons as well as parts of enterprises functioning as protective units, may perform transformation in according to the manner and the conditions prescribed by this law, only by a contract concluded with the Agency, by which the rights of employment of the previously employed persons, before this Law comes into force, will be preserved.

Article 6

Prior to the evaluation of the enterprise, the urban and the agricultural land are subtracted, which as from the day this Law comes into force, are considered as ownership of the Republic of Macedonia.

The enterprise referred to in Para 1 of this Article, continues to use and manage the urban i.e. the agricultural land, if uses and takes care, until the decision for denationalization comes into effect, i.e. until the right of utilization according to Law will be made.

 

Article 7

In accordance with this Law, the value of the enterprise is the difference between the value of the enterprise’s assets and the other rights (total assets) and the value of the enterprise’s obligations, including the obligations towards legal and physical entities, based on their fixed deposits in the enterprise.

The assets invested by the Army, the value of the equipment and the value of the Territorial Defense Forces, Civil Defense and other equipment for defense, production assets, buildings and equipment for production of armament and military equipment, the assigned budget funds, guaranteed by the Republic of Macedonia, and undertaking the obligation of payment no matter they are in regular production, are considered as the deposit of the Republic of Macedonia in the value of the enterprise.

The Ministry of Finance, by Regulations, prescribes the manner of determination of the assets referred to in Para 2 of this Article.

According to Para 1 of this Article, the obligations of enterprise do not include the permanent investment of legal entities which are brought in by pooling or joint investments, or entered on another basis, without the obligation of return and without the right to share the profit resulting from such investments.

The value of the apartments is not included into the value of the enterprise while the ownership transformation of the flat fund of the enterprises is performed in accordance with another Law.

In the total values of the enterprise, the value of the public resorts is given separately.

 

Article 8

In order to organize, control and conduct the transformation, an Agency for Transformation of Socially Owned Enterprises of The Republic of Macedonia is being founded (hereinafter: Agency).

 

Article 9

The value of the socially owned capital is appraised in the initial balance, according to the Methodology proposed by the Agency and approved by the Government of the Republic of Macedonia.

According to the Methodology referred to in Para 1 of this Article, the appraising of the value of the social capital, will be carried out by organizations and physical entities authorized by the Agency.

The appraised value referred to in Para 2 of this Article is calculated in Deutsche Marks (DEM), according to the middle exchange rate valid on the day of the completion of the appraisal.

The Agency has the right to engage another authorized Appraiser in order to revise the appraised value of the enterprise determined in accordance with Para 2 of this Article.

 

Article 10

The expenses of the transformation procedure are paid by the enterprise, except if not otherwise determined by this law and the sales agreement.

 

Article 11

The manner and the procedures of transformation depend on the size of the enterprise, i.e. Small, Medium or Large.

The Large and Medium enterprises are to be transformed into joint-stock companies. In exceptional cases, and with the Agency’s consent, Medium enterprises can be transformed into limited liability companies.

Small enterprises are transformed into limited liability companies, and by a consent of the Agency, into joint stock companies.

The joint stock or limited liability company is considered established on the date of its entry into the Court Register.

The company referred to in Part 4 of this Article is the legal successor of the transformed enterprise.

 

Article 12

According to the Law, a Small enterprise is an enterprise which fulfills at least two of the following criteria:

  1. The average number of employees in a given year, calculated in working hours, does not exceed 50,
  2. The annual income is less than 8000 average monthly wages (gross), per employed in the economy of the Republic of Macedonia and
  3. The average value of the company assets (at the beginning and at the end of the financial year) is less than 6000 average monthly wages (gross), per employed in the economy of the Republic of Macedonia.

According to the Law a Medium enterprise, is an enterprise which fulfills at least two of the following criteria:

  1. the average number of employees in a given year, calculated in working hours, does not exceed 250;
  2. The annual income is less than 40000 average monthly wages (gross), per employed in the economy of the Republic of Macedonia and
  3. The average value of the company assets (at the beginning and at the end of the financial year) is less than 30000 average monthly wages (gross), per employed in the economy of the Republic of Macedonia.

According to this Law, all other enterprises are defined as Large enterprises.

 

Article 13

Small i.e. Medium enterprise may choose the manner and the procedures of the transformation independently, while Large enterprise do so in cooperation with the Agency.

Enterprises referred to in Para 1 of this Article may combine various manner and procedures of transformation.

 

Article 14

Small and Medium enterprises have to make decision for transformation within 1 year, while the Large enterprises within a time limit agreed with the Agency, but not longer than 2 years.

The time limits referred to in Para 1 of this Article run from the day when the Methodology for assessment of the enterprises’ value comes into force.

 

 

Article 15

The decision regarding the transformation is made by the Board of Directors upon recommendation of the Management of the enterprise, within the enterprise.

To this Decision, the following will be enclosed:

The Agency issues Instruction for preparation of the program for the manner of transformation, including the content of the report regarding the appraised value of the enterprise.

The enterprise submits to the Agency and the Government Commission for Transformation of Socially Owned Enterprises, the Decision for transformation, within 15 days of the date of the issuance.

 

Article 16

Within 60 days of the receiving all documents referred to in Article 15 of this Law, the Agency gives Proposal to the Government Commission for Transformation of the Socially Owned Enterprises whether the proposed transformation is in accordance with the terms, manner and procedures prescribed by this Law.

The Government Commission for Transformation of the Socially Owned Enterprises, based on the Agency’s Proposal, within 30 days, issues a decision for commencing of the transformation procedure.

The decision referred to in Para 2 of this Article, is issued both to the enterprise and the Agency.

Against the Decision of the Government Commission for Transformation of the Socially Owned Enterprises, the enterprise can lodge a complaint to the Government of the Republic of Macedonia.

If the Government Commission for Transformation of the Socially Owned Enterprises fails to issue the decision, for commencing the transformation procedure of the Small enterprise, as referred to in Para 2 of this Article, it is assumed that the approval is given and the enterprise can commence the transformation procedure.

 

Article 17

The enterprise must publicly announce the Decision for transformation in the Official Gazette of the Republic of Macedonia, in one of the daily newspapers of the Republic of Macedonia, and in the newspapers written in the languages of the nationalities, within 8 days of receiving the Decision from the Government Commission for Transformation of the Socially Owned Enterprises.

 

 

Article 18

In case the appraised value of the enterprise changes after issuing the Decision for transformation, or the transformation is not commenced within 12 months from the date of the issuance of the Decision for transformation, the enterprise is obliged again to determine the social capital value of the enterprise.

 

Article 19

The socially owned enterprises which conduct transformation by sale of shares and stocks issue free shares to the Fund for Pension and Disabled Insurance i.e. certificate for shares in amount of 15% from the total value of issued shares, i.e. stocks.

The shares i.e. stocks referred to in Para 1 of this Article are considered as priority and:

The stocks and shares are a constant source of income to the Pension Fund.

 

Article 20

The assets obtained by the transformation, are transferred to the Agency before entry into the Court Register, and no later than 15 days following the date of the sale.

 

Article 21

The stock dividend, i.e. the company shares issued and transferred by the enterprise to the Agency, the assets obtained by sale of public resorts, as well as the part of assets whose sale is determined by Article 93 of this Law, are used for providing rights and possibilities for employment of the employees discharged due to ownership transformation.

The Government of the Republic of Macedonia enacts a program for usage of the assets referred to in Para 1 of this Article.

 

Article 22

The shares i.e. stocks issued in accordance with this Law are expressed in DEM, and are paid:

  1. in Denars;
  2. in foreign exchange registered as bank saving deposits and
  3. in Denars earned by sale of effective convertible foreign currency.

Article 23

For the amount of the foreign currency kept as saving deposit which the citizens wish to use for purchase of shares, i.e. stocks, the banks will issue receipts, no later than 15 days as from the day of submitted request. Based on these certificates, the citizens may purchase stocks from the enterprise.

The enterprise is obliged to submit the certificates referred to in Para 1 of this Article to the Agency, within 7 days.

The Agency is obliged to submit the certificate obtained by the enterprise to the Bank, within 7 days. After the receipt of the certificate from the Agency, the Bank will reduce its obligations towards the citizen resulting from the foreign currency saving. The public debt of the Republic of Macedonia will be reduced by the equivalent amount in foreign currency.

The enterprise being transformed cannot credit the purchasing of shares i.e. stocks neither to give warranties for credits for such purposes.

 

Article 24

In the transformation, domestic and foreign legal entities participate under equal condition.

Enterprise or other legal entity, in which the social capital participates with more than 30% of the total capital, cannot participate in transformation of another enterprise with social capital.

 

Article 25

The rights to purchase under privileged conditions have:

  1. Employees of the enterprise being transformed, who have been employed for at least 2 years prior to the adoption of the decision for transformation;
  2. Individuals whose employment is discontinued in the enterprise being transformed. But who worked in the enterprise for at least 2 years and
  3. Retired employees who were continuously employed by the enterprise being transformed for at least 2 years.

The right to privilege purchase is given once and refers to one enterprise only.

 

Article 26

Under privileged conditions only 30% of the shares i.e. stocks value issued by the enterprise under transformation can be purchased.

The beneficiaries referred to in Article 25 of this Law, have the right to purchase shares i.e. stocks with a basic discount of 30% of the nominal value, increased by 1% for each complete year of employment in the enterprise, but the amount of the total shares i.e. stocks purchased by discount cannot exceed 25.000 DEM.

The shares, i.e. stocks purchased under discount as referred in Para 2 of this Article, can not be sold, or transferred within 2 years as from the day of their purchase.

Article 27

The social capital in the facilities of social standard (hotels and recreative centers or similar to them) will be sold in accordance with appraised value, with a basic discount of 50% of the nominal value of the shares, increased by 1% for each complete year of employment in the enterprise.

The shares referred to in Para 1 of this Article and Para 1 of Article 26 of this Law, are available for all beneficiaries of the discount of Article 25 under equal conditions.

 

Article 28

The right to purchase of shares i.e. stocks with discount may be invoked within 3 months from the beginning of the sale of the shares i.e. stocks.

If shares i.e. stocks intended for sale are not sold within the time limit, as per Para 1 of this Article, they are to be sold under the conditions provided by Law.

 

Article 29

The enterprise keeps records of the allowed discounts of the purchased shares, i.e. stocks.

The Agency has the right to supervise the records of the allowed discounts.

The records are kept in a separate book of records in an appropriate way, prescribed by the Agency.

 

Article 30

The beneficiaries referred to in Article 25 of this Law, will be granted the right of discount during the procedure of the transformation of the enterprise.

The right if discount is approved individually.

The beneficiaries referred to in Para 1 of this Article can use the discount and other advantages defined by this Law, decreased by the advantages that have been used according to the Law of Social Capital.

 

Article 31

The revenue acquired from selling of an enterprise belongs to the Republic of Macedonia and is paid to a separate account of the Agency.

 

 

Article 32

Agreement for sale of social capital, agreed on the contrary to the provisions of this Law is null and void.

 

  1. PROTECTION OF THE RIGHTS OF PREVIOUS

OWNERS AND THEIR LEGAL SUCCESSORS

 

Article 33

During the transformation procedure the claims of former owners and their legal successors who are citizens of the Republic of Macedonia, are to be provided.

The provisions of this Law do not, in any manner, infringe upon the rights of the claimants of Para 1 of this Article, to return the properties in accordance with denationalization provisions.

 

Article 34

When the decision for transformation is made, the enterprise is obliged to invite by advertisement the former owners and their successors (hereinafter: Claimants), within 60 days of the public notice to indicate their potential claims against the enterprise.

 

Article 35

The claims referred to in Article 34 of this Law are to be submitted simultaneously to the enterprise and the Agency.

The Claimants submit their claims in a form prescribed by the Agency, which contains data about the enterprise, against which the owners have claims, about the legal basis of the ownership over the disappropriated property which is being claimed, as well as the nature and the value of the claim.

 

Article 36

The Agency, within 15 days following the expire of the time limit for the submission of claims; will inform the enterprise intending transformation, about the submitted claims or will certify that no one has indicated a claim within the time limit provided for by this Law.

The enterprise can continue with the procedures of transformation on the basis of the certificate as referred to in Para 1 of this Article.

If the Claimant has indicated the claim, the enterprise can proceed the transformation if:

 

 

 

Article 37

A fiduciary legal act, under the terms of reference of this Law, is an agreement by which the enterprise transfers the ownership of the shares, i.e. stocks to the Agency which is obliged to handle them properly.

If it is enabled by space, technological and other conditions, the enterprise, under equal conditions as referred to in Para 1 of this Article, can transfer the ownership of the real estate to the Agency.

 

Article 38

The ownership of the shares, stocks and real estate claimed by the former owners are transferred to the Agency by contractual agreement.

The enterprise has the right of first choice in leasing or renting the transferred assets.

Based on an enforceable verdict according to the regulations of denationalization, by which the claim of the owner has been accepted, the Agency transfers the shares, stocks i.e. the real astute to the owner, as well as the accumulated rent and other benefits, reduced for the expenses.

 

Article 39

Based on an enforceable verdict, based upon the regulations of denationalization, a claim of the former owner has been approved, the Agency transfers to him the ownership of shares, i.e. stocks, as well as accrued dividends.

If a claim has been rejected, the real estate i.e. shares and stocks are sold by the Agency in accordance to the provisions of this Law.

 

Article 40

For the purposes of just indemnification of the Claimants referred to in Article 34 of this Law, part of the proceeds of the sale of enterprise, will also be used.

 

 

  1. MANNERS AND PROCEDURES FOR TRANSFORMATION
  1. Transformation of a Small Enterprise

 

Article 41

A Small enterprise is transformed by:

  1. Purchase of the enterprise by its employees and
  2. The sale of indivisible (ideal) part of the enterprise.

 

1. Purchase of the enterprise by the employees

Article 42

The employees of the enterprise can purchase the enterprise if they purchase at least 51% of the appraised value of the enterprise, in a manner and in accordance with the conditions determined by the Decision for transformation and the Decision for organizing of the enterprise as a company with limited liability.

For the non-purchased part of the social capital, the enterprise issues to the Agency a certificate presenting the Agency’s share in the enterprise.

 

Article 43

The right to buy shares in a Small enterprise, under equal conditions, have all of the employees of the enterprise.

 

Article 44

The owners of shares (hereinafter: Shareholders) have the management right in accordance with the Decision for organizing of the enterprise into company with limited liability, rights to dividends, as well as rights to a proportional part of the remainder of assets after the payment to creditors in case of bankruptcy of the enterprise.

 

Article 45

The Agency as a Shareholder has:

 

Article 46

The Shareholders of the enterprise are obliged in accordance with the Program for the manner of transformation, within 5 years after the registration of the transformation into the Court’s Register, to purchase the share from the Agency in its nominal value as determined in accordance with this Law.

 

Article 47

As exception from Article 46 of this Law, if the Shareholders in the enterprise, each year after the acceptance of the financial account, do not purchase at least 1/5 of the shares hold by the Agency, on the basis of unsold shares, the Agency performs the managing rights of the other Shareholders.

Shareholders employed in the enterprise may use the dividend only to purchase shares hold by the Agency, until the total purchase of the enterprise.

The Agency will immediately publicly announce the part which was not purchase as referred to in Para 1 of this Article.

 

  1. The sale of an indivisible (ideal) part of the enterprise

Article 48

The indivisible (ideal) part of the enterprise may be sold by:

  1. via public announcement, for collecting offers
  2. by direct agreement

The public announcement for collecting offers and the direct agreement are carried out by the Agency or legal and physical entities authorized by the Agency.

 

Article 49

The opening price is determined in accordance with the appraised value of the enterprise.

 

Article 50

After the collection of the offers in accordance with Article 48 of this Law, if there are at least 2 bidders, a public auction will be conducted.

The participants in the public announcement are obliged to deposit a fee in the amount of 5% of the appraised value indivisible (ideal) part of the enterprise.

The participants whose rights have been violated within the procedure, has the right to submit a compliant to the Agency and to demand protection of his rights in front of the competent Court.

 

 

Article 51

If, the enterprise is not sold after the second public auction, the sale can be performed through direct agreement, but the indivisible (ideal) part of the enterprise can not be sold by a price lower than 80% of the appraised value of the enterprise.

 

Article 52

The Agency and the purchaser will conclude a written agreement for sale of the enterprise in accordance with the Decision for transformation.

 

 

 

 

Article 53

The purchaser of the indivisible (ideal) part of the enterprise, which is lower than 51% of the appraised value, makes decision for organizing of the enterprise as a company with limited liability with the consent of the Agency.

The enterprise organized as a company with limited liability based on purchase of an indivisible (ideal) part, issues to the Agency a certificate for the remainder of the social capital.

 

Article 54

An enterprise can be sold by sale of shares.

The sale of shares is executed under the conditions determined by the Decision for organizing of the enterprise as a company with limited liability, made in accordance with the Decision for transformation of the enterprise.

The shares may be sold through:

  1. public announcement and
  2. negotiations with potential purchasers

The public announcement for sale of shares gives the provisions concerning the conditions for purchase the shares, the time limits for registration, payment and other data determined by the Decision for organizing of the enterprise as a company with limited liability.

The shares may be simultaneously sold in several stages, in manners determined as referred to in Para 3 of this Article, if the shares are sold within a time limit not exceeding 1 year.

  1. TRANSFORMATION OF A MEDIUM ENTERPRISE

Article 55

Medium enterprise is transformed by:

  1. A sale of the indivisible (ideal) part of the enterprise;
  2. Buy-out of the enterprise;
  3. A sale of the enterprise to entities who will undertake the management of the enterprise;
  4. The issue of shares for additional investment and
  5. Debt-Equity Swap

 

  1. The sale of indivisible (ideal) part of the enterprise

Article 56

The provisions of this Law refer to the conditions and procedures to the sale of indivisible (ideal) part of a Small enterprise, are also applied to the sale of a Medium enterprise.

 

 

  1. The buy-out of the enterprise

Article 57

The buy-out of the enterprise will be performed in the manner and under conditions determined by the Decision for transformation of the enterprise.

The enterprise, in accordance with the Decision for transformation, simultaneously makes a Decision to issue shares and Decision for organizing of the enterprise into a joint-stock.

The enterprise will transfer to the Agency the unsold shares considered as priority shares.

 

Article 58

Priority will be given to purchasers offering better buy-out conditions.

Under equal conditions, priority for buy-out will be given to the employees of the enterprise.

The buy-out of the enterprise is considered successful if the amount of the purchased shares is at least 51% of the appraised value of the social capital.

 

Article 59

The priority shares issued by the enterprise to the Agency, allow for:

The shares of Para 1 of this Article, are offered by the Agency, no later than 3 months after their reception.

The Agency will convert the shares of Para 2 of this Article into ordinary shares prior to their sale.

 

  1. Sale of the enterprise to entities that will assume the management of the enterprise.

Article 60

The enterprise can be sold to entities who will assume the managing and leading of the enterprise (hereinafter: entities who assume the management of the enterprise). The management of the enterprise may be taken over only by entities who propose programs for development of the enterprise.

 

Article 61

The sale of the enterprise to entities that will take over the managing of the enterprise will be done through a public announcement for collecting offers. The Agency will execute the activities of Para 1of this Article.

 

Article 62

The entities that will take over the managing of the enterprise are obliged to buy at least 20% of the appraised value of the enterprise.

During the sale of the enterprise to entities that willtake over the managing of the enterprise, priority will be given to those who will offer better programs and other convenient conditions for development of the enterprise.

The Agency and the entities that will take over the managing of the enterprise will conclude a selling agreement.

The agreement of Para 3 of this Article determines the period of time necessary for the entities that will take over the managing of the enterprise to buy-out at least 51% of the value of the shares in a period not longer than 5 years.

 

Article 63

After taking over the managing and the organization of the enterprise into a joint stock company, the enterprise issues to the Agency priority shares, equal to the amount of the unsold social capital.

The shareholders of ordinary shares may use the dividend only to purchase shares as of Para 1 of this Article, hold by the Agency.

If the shares from Para 1 of this Article are not purchased within the time limit agreed with the Agency, the shares hold by the Agency will be converted from priority into ordinary shares.

 

Article 64

The agreement for sale of the enterprise will cease if the entities who take over the managing of the enterprise will not fulfill the obligations arising from the agreement.

In accordance with this Law, the agreement referred to in Para 1 of this Article will cease if:

In case the agreement ceases in order to fulfill the conditions referred to in Para 2, Point 2 of this Article, the approved loss will be covered solidary by the entities who look over the managing of the enterprise.

In order to insure the obligations referred to in Para 3 of this Article, the entities who undertake the managing of the enterprise will put their property under mortgage.

 

 

  1. The issue of shares for additional investment

 

 

 

Article 65

The enterprise can issue shares for additional investment.

The decision to issue shares is adopted by the enterprises in accordance with the Law of Papers of Value.

The shares refers to in Para 1 of this Article are without discount.

The required funds resulting from the sold shares for additional investment will remain in the enterprise.

 

Article 66

The purchasers of shares from which the additional capital is acquired and the enterprise, in consent with the Agency, conclude a contract in order to determine the mutual relations as well as the manner of organizing of the enterprise as a joint-stock company.

If the nominal value of the purchased shares for acquiring additional capital amounts to at least 30% of the appraised value of the enterprise, the enterprise, on occasion of the procedure of organization into joint-stock company, issues to the Agency priority shares for the remainder value of the social capital.

 

Article 67

The agreement referred to in Para 1 of Article 66 of this Law determines the time limit within which the shareholders on the base of additional investment are obliged to buy at least 51% of the total capital of the enterprise within a period not exceeding 5 years.

Holders of ordinary shares on the basis of additional investment may use the dividend only to purchase shares referred to in Para 2 of Article 66 of this Law, hold by the Agency.

Shares referred to in Para 2 of Article 66 of this Law are not sold during the time limit agreed with the Agency, the shares hold by the Agency are converted from priority into ordinary shares prior to their sale.

 

5. Debt-Equity Swap

Article 68

The enterprise by an agreement with the creditor arranges to transfer its debts-equity, for which it will issue shares for a joint stock company i.e. stocks in a company with limited liability.

For acquired shares i.e. stocks the enterprise and the creditor will conclude an agreement in a written form.

In compliance with the agreement referred to in Para 2 of this Article, the Management Body of the enterprise will make a Decision to organize the enterprise onto a joint stock company or into company with limited liability.

 

 

  1. TRANSFORMATION OF A LARGE ENTERPRISE

Article 69

The Management Body of the Large enterprise and the Agency on a parity basis, will constitute a Board for transformation of the enterprise.

The Large enterprise makes the Decision for transformation in agreement with the Agency.

The Large enterprises organized in a complex form will prepare integral program for the manner of the transformation.

 

Article 70

The Board for transformation will prepare a Decision for transformation of the enterprise in which besides its constituent parts referred to in Article 15 of this Law, will also pay a particular attention to the activities concerning the organizational and financial restructuring of enterprise.

 

Article 71

Transformation of large enterprise is executed in accordance with the manner and procedures, in compliance with this Law, are also applied for this transformation of Medium enterprises, except for the condition referred to in Para 1 of Article 62, for person that will take over the managing of the Large enterprise is at least 10% of the appraised value of the enterprise, as well as the condition of Article 66, Para 2 which for the Large enterprise amounts to 15%.

Article 72

the sale agreement of a Large enterprise or an indivisible (ideal) part thereof, for investment of capital into the enterprise, for the transformation of the investment on the basis of agreement and debts transformed into investment are executed by the Agency.

 

  1. LEASING OF THE ENTERPRISE

Article 73

The enterprise may conclude an agreement for leasing of a part of the assets of the enterprise for a limited time.

Following the completed assessment of the value of the assets which are being leased, the enterprise executes the procedure for public auction for collecting offers.

 

Article 74

the agreement for leasing a part of the assets should include a buying arrangement (buy-out clause) for the assets being leased, where besides the lease payments, purchase of the assets is included.

The validity of the agreement for leasing in which the buy-out clause is included will be concluded for a time limit not exceeding 7 years.

 

Article 75

The demand for the lease for the part of the assets of the enterprise, is submitted by the enterprise simultaneously to the Agency and the Commission of the Government for Transformation of Enterprises with social Capital.

The Agency, within 60 days of the receipt of the demand, issues proposal to the Government Commission for Transformation of Enterprises with Social Capital.

The agreement for leasing may be concluded if the enterprise provided permission from the Government Commission for Transformation of Enterprises with Social Capital. Agreement included without permission from the responsible ministry is not legally valid.

The Government Commission for Transformation of Enterprises with Social Capital, on the basis of the recommendation of the Agency referred to in Para 2 of this Article, within 30 days, is obliged to adopt a decision.

If the decision was not adopted within the time limit referred to in Para 4 of this Article, the permission is considered as given.

 

  1. TRANSFORMATION BY THE SALE OF ALL ASSETS OF THE ENTERPRISE

 

Article 76

The transformation of an enterprise considers the sale of all the assets of the enterprise which lead to discontinuance of the enterprise.

The decision to sale all the assets of the enterprise is adopted by the Management Body of the enterprise.

The liabilities of the enterprise being discontinued by the sale of all of its assets are referred to the Agency.

The mutual relations between the Agency and the enterprise’s creditors discontinued by the sale of all of its assets are regulated in compliance with the regular bankruptcy provisions.

 

 

Article 77

Prior to concluding of an agreement for the sale of all assets of the enterprise, the enterprise is obliged to insure a permission from the Government Commission for Transformation of Enterprises with Social Capital.

The Government Commission for Transformation of Enterprises with Social Capital is obliged to grant consent as per Para 1 of this Article within 30 days, from the reception of the recommendation of the Agency.

The Agency is obliged to give its recommendation referred to in Para 2 of this Article to the Government Commission for Transformation of Enterprises with Social Capital within 60 days from the day of the submission of the request of the sale of all assets of the enterprise, which is simultaneously submitted to the Agency and the Government Commission for Transformation of Enterprises with Social Capital.

The agreement for sale of all assets is concluded by the Agency with the purchaser after the receipt of the consent as referred to in Para 1 of this Article.

 

 

Article 78

The enterprise will cease to exist on the agreed date of sale of all of its assets.

As from the day the enterprise ceases to exist, the legal consequences for employees remain the same as at the beginning of bankruptcy.

The agreement for the sale of all assets may envisage the right of the employees to be employed by the purchaser, as well as other rights.

 

Article 79

The Agency submits the agreement for the sale of all assets to the relevant Court of Registry, which, in accordance with Para 1 Article 78 of this Law, removes the enterprise from the Court Register.

The removal of the enterprise from the Court Register is to be announced in Official Gazette of the Republic of Macedonia, at the expense of the Agency.

 

  1. TRANSFORMATION OF ENTERPRISE UNDER BANKRUPTCY

Article 80

The creditors may submit a proposal to the Bankruptcy Committee to cease temporarily bankruptcy proceeding and the enterprise may continue to operate.

The Bankruptcy Committee constitutes a Board of Creditors which nominates a Management Board of the enterprise which will choose the entities to be entrusted to organize and represent the indebted enterprise.

 

Article 81

The Management Board within a time limit of 60 days will adopt a program for finance and ownership transformation, which includes measures, actions and activities towards the long term consolidation of the enterprise, especially regarding:

The financial and ownership transformation program may also foresee a compulsory swap of the debts into permanent investment.

Article 82

At a summon called by the Bankruptcy Committee, the creditors declare and vote regarding the program for the financial and ownership transformation.

The program is considered as accepted when the creditors whose claims exceed the claims of all the creditors with voting rights; and after it has been approved by the Bankruptcy Committee.

The creditors may also vote in a written form if signed by the authorized representative of the creditor.

The forced settlement of accounts, as well as other measures in the transformation program have legally binding effect on all creditors.

 

Article 83

Following the consolidation and reorganization of the indebted enterprise, no later than 12 months of the decision for suspension of the bankruptcy, the Management Board, with prior approval from the Bankruptcy Committee, decides for the ownership transformation into a joint stock or limited liability company, which halts the bankruptcy procedure.

If the readjustment and the reorganization of the indebted enterprise will not give the expected results, the Management Body will recommend to the Bankruptcy Committee to proceed bankruptcy.

The bankruptcy procedure will continue even the Bankruptcy Committee will not give prior consent as referred in Para 1 of this Article.

 

Article 84

When readjustment and reorganization of the indebted enterprise, the provisions of the Law on Compulsory Readjustment and Bankruptcy (Official Gazette of the SFRY No. 84/89) will be applied.

The employment of the employees is discontinued and they have the rights to claim all the rights as the employees of enterprises in bankruptcy, except in the case where the creditor i.e. the Management Body have provided more favorable conditions.

The employment of the workers temporary kept (employment on a temporary basis), following a successful consolidation and reorganization i.e. adoption of a decision for transformation, may be converted into employment on a permanent basis.

 

Article 85

Creditors whose claims exceed half of all of the claims, in agreement with the Committee of creditors may form a joint stock or limited liability company, which assumes guarantees to fulfill all obligations towards other creditors.

The relations between the creditors referred to in Para 1 of this Article are regulated by an agreement.

The agreement referred to in Para 2 of this Article becomes legally effective upon its approval by the Bankruptcy Committee.

 

Article 86

After the completion of the bankruptcy of the enterprise, the rest of the bankruptcy estate will be transferred to the Agency, proportionate to the participation of the social capital in the permanent capital of the enterprise.

 

 

 

  1. AGENCY OF THE REPUBLIC OF MACEDONIA FOR THE TRANSFORMATION OF ENTERPRISES WITH SOCIAL CAPITAL

 

 

Article 87

The Agency has a status of a legal entity and public authorization regulated by the Law.

The Agency carries out its task independently.

 

Article 88

The Agency is managed by a Management Board, consisting of 9 members.

The Agency is headed by a General Manager.

The members of the Management Board of the Agency and the General Manager of the Agency are nominated by the Government of the Republic of Macedonia, selected from competent experts.

In order to carry out its tasks, the Agency may hire other competent, domestic and foreign consultants and advisors.

 

Article 89

The Agency carries out the tasks regarding the organization and the control of the transformation of the enterprises.

The Agency supervises directly the proceeding transformation, when the enterprise does not act in accordance with the deadlines and manners regulated by this Law.

In cases referred in to Para 1 and 2 of this Article, the Agency undertakes all activities regarding the transformation procedures, which according to this Law, have the right and are obliged to be conducted by the Management Council of the enterprise.

The Agency will undertake all activities regarding the transformation proceeding of the parts of the enterprise, for which the enterprises, i.e. legal entities do not have ownership clarification.

 

 

Article 90

The Agency will enact a Statute, which regulates the functioning and the organization of the Agency.

The Statute is adopted by the Management board of the Agency, within 30 days following its establishment.

The Statute of the Agency is approved by the Government of the Republic of Macedonia.

 

Article 91

The General Manager, the members of the Management Board of the Agency are not allowed to purchase shares i.e. stocks of enterprises being sold by the Agency.

Article 92

The Agency prepares annual program for operation, including financing plan approved by the Government of the Republic of Macedonia.

The expenses and running costs of the Agency, incurred in accordance with its program of activities, are covered by the income of the Agency.

The Agency submits annual report to the Parliament of the Republic of Macedonia regarding its activities and the utilization of its assets. An Interim report of the same nature, the Agency also submits to the Government of the Republic of Macedonia, twice a year.

 

Article 93

The assets obtained by the Agency, are paid monthly to a separate Republic account.

The assets referred to in Para 1 of this Article will be used for:

The Parliament of the Republic of Macedonia, upon proposal of the Government of the Republic of Macedonia, will prepare a program for the use of the funds as referred to in Para 2 of this Article.

 

Article 94

Prior to shares issued by the enterprise and transferred to the Agency, and are specialized by name, in addition to the rights provided for by this Law, also give to the Agency rights to issue preliminary consent to enterprises for diminishment of the basic capital, continuation and early discontinuation of the enterprise, merging or fusing of the enterprise, the disownment of the enterprise’s assets, leasing the enterprise or its major parts, or entering into similar contracts which comprise not less than 20% of the value of the basic capital, the transformation of the enterprise from one form to another.

The approval of Para 1 of this Article is issued by the Agency, at least within 30 days from the date of the submitted requirement.

 

Article 95

The shares and stocks issued by the company created by the transformation of enterprise with social capital, are placed on the marked by the Agency under conditions provided for by this Law.

The sale of shares is announced in one of daily newspapers of the Republic of Macedonia, as well as in the newspapers written in the languages of the nationalities and the Official Gazette of the Republic of Macedonia.

Prior to the establishment of the stock market, the Agency will regulate the manner and procedure of the sale of its shares in accordance with this Law.

 

  1. APPLICATION OF THE PROVISIONS OF THIS LAW

Article 96

The provisions of this Law implemented for the shares in joint stock company, are equally applied to the stocks of companies with limited liability.

 

Article 97

Enterprises operating with foreign capital as enterprises of mixed ownership, are transformed by an agreement with the foreign person, within 1 year from the day that comes into force.

In the agreement as referred to in Para 1 of this Article could not be reached, the manner and the procedure of transformation will be executed by the Agency.

 

Article 98

In cases where the social capital constitutes not less than 51% of the total value of the capital, the enterprise can change the location of its Headquarters, i.e. amend its Statute in a manner in which a significant part of the enterprise is transferred to the ownership of an enterprise with Headquarters outside the Republic of Macedonia, only with the consent of the Government Commission for Transformation of the Socially Owned Enterprises.

 

Article 99

If not otherwise regulated by Law, the protection of the enterprises in the transformation proceeding, as well as their social capital, is executed by the Public Attorney of the Republic of Macedonia.

The Public Attorney undertakes all measures and legal regulations and performs other legally determined rights and obligations in order to protect the enterprises and the social capital during the transformation proceeding.

The Public Attorney conducts in front of the Constitutional Court of the Republic of Macedonia or in front of the Courts, a procedure in order to revoke and annul the decision or other acts which affect the social capital.

 

Article 100

Transformation executed in accordance with this Law, should enter the Court Register.

The Government of the Republic of Macedonia will amend the regulations on the registry of enterprises and other legal entities engaged in economic activities in the Court Register regarding the manner of registration of the transformation executed in accordance with this Law.

 

 

  1. PENAL PROVISIONS

Article 101

The legal person will pay for the trade misconduct the amount of between 150-250 wages for if:

  1. commences the transformation procedure without proper evaluation of the social capital (Article 9);
  2. it does not issue shares i.e. certificates for stocks, or if the decision has been adopted by an unauthorized body (Article 15);
  3. it does not submit the Decision for transformation to the Agency including all required documentation (Article 18);
  4. it concludes agreement for sale, rent, franchising or other form of managing of social capital without the consent of the Government of the Republic of Macedonia, of the Government Commission for Transformation of the Owned Enterprises, i.e. the Agency, in cases prescribed by this Law (Article 16);
  5. it does not transfer the assets acquired by the transformation to the Agency the determined time period (Article 20);
  6. it does not provide certificates within the determined time limit, for the foreign currency savings of the citizens, which they intend to use for purchase of share stocks (Article 23);
  7. it provides sale of shares i.e. stocks under more favorable conditions in accordance with this Law (Articles 25, 26, 27 and 28);
  8. it does not keep a record of issued shares, or if it keeps it inadequately (Article 29);
  9. it does not make possible the fulfillment of the rights of the former owners interferes with the procedure of the claimants (Articles 34, 36, 37 and 38);
  10. it does not act in accordance with the instructions of the Agency in the cases referred to in this Law (Article 89);
  11. in does not inform within the time limit prescribed by this Law the Agency, the executed transformation in accordance with the Law for Social Capital (Article 103);
  12. it does not enable revision by the competent institutions of the required documentation (Article 103) and
  13. it does not eliminate the faults determined by the supervision of the competent transformation according to the Law for Social Capital.

Enities responsible for criminal offense referred to in Para 1 of this Article will pay amount of 8-10 wages.

 

Article 102

The General Manager and the members of the Management Board of the Agency should be put in the prison for a period from 1 up to 10 years, if they buy shares i.e. stocks from the enterprises sold by the Agency.

The shares and stocks referred to in Para 1 of this Article, will be taken off.

 

  1. TRANSITIONAL AND FINAL PROVISIONS

Article 103

The enterprise which has before the date of coming into force of this Law, executed ownership transformation, is obliged to, within the time limit of 30 days following the date of the coming into force of this Law, to inform the Agency and to submit copies of the decision permitting to the issue of the internal shares i.e. stocks as well as for the organizing the social enterprise as a joint stock company i.e. company with limited liability in private or mixed ownership.

Along with the date referred to in Para 1 of this Article, the enterprise is obliged to submit data regarding the appraised value of the social capital prior to the transformation procedure, the right to purchase internal shares, the subscribed internal shares, the discount, the manner of payment of the internal shares, i.e. stocks and the manner of execution of the transformation of the socially owned enterprise.

The authorized institution for revision of the legality and the accuracy of the financial records, will make a revision of the records from the annual reports for 1989, 1990, 1991 and 1992, i.e. since the year in which the book keeping value of the capital was used as a basis upon which the privatization of the social capital in accordance with the Law of Social Capital was executed, the results of business activities in accordance with the regulations and the standards for economic financial revision, the manner of determining the social capital in accordance with the Regulations for determining the amount of the business fund (Official Gazette of the SFRY No. 53/90), the Regulations for calculation of the six and three year amount of the paid net personal salaries in the enterprise and the manner for determining the proportional amount of the allowed discount for the internal shares (Official Gazette of the SFRY No. 53/90), the accuracy of the rates and the discount allowed for the internal shares, the records of stock capital on the basis of the issued internal shares, in accordance with the Regulations for amending the rules, pertaining to the account and the chart of accounts (Official Gazette of the SFRY No. 21/89, 36/89, 5/90, 7/90 and 6,92) and other accounting and book keeping statements which are of importance for determining the legality of the transformation of the social capital, revision of the revaluation of the unpaid part of the internal shares in accordance with the Law for Social Capital, as well as the revision of the disposition of the re-evaluated reserve and profit in accordance with the Law of Accountancy (Official Gazette of the SFRY No. 12/89, 35/89, 3/90, 42/90 and 61/90).

In cases when the internal shares have been issued on the basis of the Law of Payment for Personal Salaries, Common Consumption of the Employees and the Funds for the Meals of the Employees During Working Hours (Official Gazette of the SFRY No. 37/90 and 84/90) as referred to in Para 3 of this Article, a revision of the legality and the accuracy of the application of Article 4 of the Law of Payment for Personal Salaries, Common Consumption of the Employees and the Funds for the Meals of the Employees During Working Hours, and in particular whether the issued internal shares have been accounted for real income and whether the shareholders capital has been used to cover the losses if registered by the enterprise.

 

Article 104

In the course of the revision of the application of the Law of Social Capital, it will be particularly determined whether:

Article 105

If the Agency determines that the procedures for organizing the enterprise into a company has not been carried out in accordance with the Law it adopts an act determining the time limit no longer than 30 days, within which the determined faults are to be eliminated.

Against the act referred to in Para 1 of this Article, the enterprise may file a complaint to the Government Commission for Transformation of Socially Owned Enterprises.

If the enterprise does not eliminate the faults, the Agency informs the Public Attorney, who within 30 days submits accusation to the competent Court, in order to determine invalidity in the entry of the Court Register regarding the executed transformation, i.e. the privatization of the social capital and organizing the socially owned enterprise into a joint stock company or limited liability company in mixed or private ownership.

If the Court rules the entry in the Court Register to be null and void, the statutes amendment executed by the enterprise which has been in social ownership i.e. the change of the ownership of the social capital is struck off from the Court Register.

The invalidity of the entry in the Court Register could be determined within a period of 3 years following the day this Law comes into force.

 

 

Article 106

If in enterprises or in those depending of them, or linked enterprises, which in period from January 1, 1990 to the date this Law comes into force, have executed transformation or reorganization or any other statute change (integration, joining or division) transferring social capital or have established or invested into new enterprises, or have alienated social capital or certain business functions to other enterprises, there is doubt that the social capital is being affected, financial, book keeping and legality revision of the accuracy will be carried out.

The revision referred to in Para 1 of this Article will be performed by an authorized organization for control of the accuracy of the book keeping statements, competent institutions and authorized entities.

The revision referred to in Para 1 of this Article will be conducted at the requirement of the Public Attorney, Prosecuting Attorney, Inspection bodies and the Agency.

The proposal submitted by the Public Attorney, Prosecuting Attorney and the Inspection bodies, the Agency will submit it to the authorized organization for control of the legality and accuracy of the book keeping statements, authorized institutions i.e. physical entities.

The Report of the carried out revision will be submitted to the Agency, the Public Attorney and Prosecuting Attorney for bringing criminal charges against.

The enterprises referred to in Para 1 of this Article are obliged, during the revision and provide the authorize bodies with a report in which the procedure and documents concerning the use of the social capital.

If the revision proves that the social capital has been affected, the Public Attorney will conduct legal proceeding to revoke or to determine the invalidity of particular acts and agreements by which the social capital has been affected.

The transformation in accordance with this Law, can not start or continue, until the proceeding referred to in Para 7 of this Article is being completed.

The Agency, the Public Attorney and the Public Prosecuting Attorney following the report of the executed revision, may require additional revision concerning certain unclear matters.

The entities authorized to execute the revision referred to in Para 1 of this Article have official status and are legally responsible.

 

 

Article 107

Enterprises referred to in a Article 3, Para 1 of this Law which have executed the transformation into a shareholders companies or into companies with limited liability of mixed or private ownership, before the adoption of a Law which will stipulate the conditions and the manner of their organization and ownership transformation and by which the status will be defined in greater detail, can not undertake activities in accordance with the Law.

Enterprises referred to in Para 1 of this Article, issue to the Agency ordinary shares of the remainder social capital, which will secure for the Agency a majority of voting rights in the Assembly of the company.

 

 

 

Article 108

Prior to the ownership transformation, relations which have been created on a basis of associated, invested or transferred funds with an obligation to be paid or providing for participation in the income or gains, are regulated.

 

Article 109

Internal shares issued on the basis of the Law of Social Capital, and paid for in cash, are converted onto ordinary shares.

Internal shares issued in accordance with the Law of Social Capital an paid for with internal shares, issued in accordance with Article 4 of the Law of Personal salaries, Common Consumption of the Employees and the Funds for the Meals of the Employees During Working Hours, are considered as ordinary shares, if the internal shareholders pay for them in accordance with the legally prescribed obligations.

Internal shares issued in accordance with Article 4 of the Law of Personal Salaries, Common Consumption of the Employees and the Funds for the Meals of the Employees During Working Hours, which have not been used for payment of the internal shares issued in accordance with the Law of Social Capital, are considered as ordinary shares.

The obligations referred to in Para 2 of this Article are calculated by nominal value of the internal shares, and are paid 3 months as from the day of the conducted control, i.e. revision determined by this Law, following the revalorization of the increased real prices on the day of their payment.

Internal shares of Para 1, 2 and 3 of this Article, by this Law, acquire value of ordinary shares, and are considered as shares in accordance with the Law of Papers of Value.

Entities who drew internal shares in accordance with the Law for Social Capital, did not pay the rate within the period determined by the decision for issuing of internal shares, will lose the right to continue payment for internal shares.

If the time limit referred to in Para 6 of this Article is not determined by the decision, it will be considered that the entities have not paid in time the drawn internal shares, if they have not paid 2 rates one after another, or 3 rates with interruptions within 6 months.

The Agency issues a Regulation by which, the internal shares referred to in Para 1, 2 and 3 of this Article, will be transferred into ordinary shares.

 

Article 110

Following the date of coming into force of this Law, the internal shares issued in accordance with the Law of Social Capital and the Law of Personal Salaries, Common Consumption of the Employees and the Funds for the Meals of the Employees During Working Hours, can not be sold until their transformation, which will be effected in accordance with Article 109 of this Law.

 

Article 111

The enterprises are not allowed to sell buildings and another assets of value bigger of 50.000 DEM without the consent of the Agency, following the date this Law comes into force until commencing the transformation.

The consent referred to in Para 1 of this Article will be issued by the Agency within 30 days upon the requirement of the enterprise.

The assets acquired by the sale referred to in Para 1 of this Article are paid to the Agency.

 

Article 112

The Agency starts to operate from the day of the appointment of the members of the Board of Directors and the General Manager of the Agency.

The appointment of the members of the Board of Directors and the General Manager of the Agency will be done within 15 days, following the date this Law comes into force.

The assets, the employees ant the other rights and obligations of the Agency for Reconstructing and Development, as well as of the Republic Development Fund will be undertaken by the Agency.

Following the date this Law comes into force, the Law for the Agency for Reconstructing and Development (Official Gazette of the SRM 20/90 and 36/90) and the Law for the Republic Development Fund (Official Gazette of the SRM 20/90) ceases to be enforced.

 

Article 113

Following the date this Law comes into force, the Law of Social Capital ceases to be enforced (Official Gazette of the SFRY No. 84/89 and 46/90) and Article 36 from the Law of Enterprises (Official Gazette of the SFRY No. 77/88, 40/89, 46/90 and 61/90) as well as Article 145-b of the Law of Enterprises will not be implemented to socially owner enterprises and enterprises with mixed ownership regarding the management with the social capital.

Article 187-a of the Law of Enterprises will not be implemented as long as the transformation is executed.

 

 

Article 114

Enterprise which has initiated the transformation procedure, in accordance with the Law of Social Capital, but has not completed it, will continue with the procedure in accordance with the provisions of this Law.

 

Article 115

The legal acts provided by this Law will be enacted by the Government of the Republic of Macedonia, the Government Commission for Transformation of Socially Owned Enterprises and the Agency, not later than 90 days following the date this Law comes into force.

 

Article 116

This Law comes into force on the 8th day following its publication in the Official Gazette of the Republic of Macedonia.