Among the more significant areas that are not yet regulated by the Law on Trade Companies are the forced purchase and sale of shares, or the so-called “squeezing out” in joint stock companies with a dominant and concentrated ownership structure where one majority shareholder owns over 95% of the shares with voting rights, as well as the holding as forms of connecting the companies.
The proposed amendments to the Law on Trade Companies represent an attempt to solve the problem that the joint-stock companies in the Republic of North Macedonia have been facing until now.
Namely, the purpose of the proposed changes is to regulate the forced purchase and sale of shares, or the so-called “squeezing out” by the Law on Trade Companies, as a very significant issue for minority shareholders and for the dominant shareholder who owns more than 95% of the shares with voting rights, through the establishment of an exact and precisely prescribed legal procedure on how to achieve the “squeezing out”, i.e. its right to forced redemption, that is, the right to sell the shares, by developing fair processes of valuation of the price of the shares and guaranteed equal treatment of the shareholders.
The forced purchase and sale of shares or the so-called “squeezing out” in the Law on Trade Companies is important to be regulated, because as a result of the concentrated ownership structure of certain joint-stock companies, there is low liquidity of their shares on the stock exchange, as well as a small share of the shares owned by the public. Hence, in the process of “squeezing out” the obligations of the dominant shareholder should be clearly prescribed and defined, which includes the obligation to buy the shares of the minority shareholders, i.e. the rights of the minority shareholders to demand the compulsory sale of their shares to the dominant shareholder should also be properly prescribed in a legal procedure that ensures fair and transparent treatment.
When it comes to the holding company in the existing legislation, the holding (Concern Company), as a special form of organization and operation of trade companies is not explicitly defined.
The legal regulation of the holding, i.e. the concern company and regulation of the issues related to its functioning, and especially the tax treatment for these entities, can significantly contribute to simplifying and improving the application of the existing legal provisions that regulate the way these forms of connection between trading companies function, significant improvement of the business results of these entities, as well as improvement of their operations in the country, which will ensure further economic growth and improvement of the economic system.
With the current implementation of the provisions of the Law on Trade Companies that regulate this matter, the need to regulate certain segments, issues and specificities for the functioning of holding companies, i.e. concerns, primarily from the aspect of their management, through the conclusion of appropriate agreements between companies is indisputable. The growth and improvement of the operations of business entities sets as a necessity the need to connect trading companies and enable for such special trading entities to arrange a special mode of functioning, which will be adapted to the specificities.