Section III Management

Types of Organs
Article 135

(1)

The company's organs shall be:

1.

the general meeting;

2.

the manager (managers).

(2)

The manager does not necessarily have to be a partner.

General Meeting of Partners
Article 136

(1)

The general meeting of partners shall consist of the partners.

(2)

The company's manager shall take part in the general meeting's sittings in a consultative capacity.

(3)

Where the number of employees exceeds 50, they shall be represented in the general meeting in a consultative capacity.

Powers of the General Meeting
Article 137

(1)

The general meeting shall:

1.

amend the articles of incorporation;

2.

(Amended - SG 103-1993) admit and expel partners, give consent on the transfer of an interest to a new partner;

3.

approve the annual report and balance sheet, distribute the profits and resolve on their payment;

4.

resolve on the increase or decrease of the registered capital;

5.

appoint a manager, fix his remuneration and relieve him of liability;

6.

resolve on setting up or closing down branches and participation in other companies;

7.

resolve on the acquisition or alienation of real property and real rights therein;

8.

resolve on bringing a company action against the manager or comptroller and appoint an attorney to proceed with the suits against them;

9.

resolve on additional monetary contributions.

(2)

Each partner has as many votes in the general meeting as its interest of the capital, unless the articles provide otherwise.

(3)

(Amended - SG 103-1993, SG 84/2000) Resolutions under items 1, 2 and 9 of paragraph 1 shall be adopted by a majority of more than three thirds of the capital and the decisions under item 4 - unanimously by all partners, and the articles of incorporation may provide for a larger majority. The partner whose expulsion is put to a vote shall not vote. All remaining resolutions shall be adopted with a majority of the capital, unless the articles provide otherwise.

(4)

The partners may vote by proxy only when such proxy holds a special power of attorney in writing; the above rule shall not apply to partners which are legal persons or to agents by operation of law.

(5)

The general meeting shall adopt resolutions on labor and social issues only after hearing the position of a representative of the company's employees.

Convening a General Meeting
Article 138

(1)

A general meeting shall be convened by the manager at least once every year.

(2)

The manager shall also convene a general meeting upon the request in writing of the partners whose interests amount to at least one tenth of the capital. Should the manager fail to convene a general meeting within two weeks, the partners which have requested its convening shall be entitled to do so.

(3)

The manager shall convene a general meeting immediately should the losses exceed one fourth of the registered capital.

Notice of General Meeting
Article 139

(1)

The general meeting shall be convened by a notice in writing received by each partner at least 7 days before the date of the meeting, unless the articles provide otherwise. The notice shall specify the business to be transacted.

(2)

general meeting resolutions may be adopted in absentia when all partners have stated in writing their consent for the resolution.

Registration of Resolutions
Article 140

(1)

The general meeting resolutions which are related to registrations pursuant to Article 119, paragraph 2 shall be registered in the commercial register.

(2)

Paragraph 1 shall apply to the resolutions of the owner of a single person company.

(3)

(New, SG 84/2000) The decision regarding amendment and supplement of the articles of incorporation, capital increase or decrease, admittance or expulsion of a partner, transformation and termination of the company, as well as appointment of a liquidator shall enter into force from their entry in the commercial register.

Management and Representation
Article 141

(1)

The manager shall organize and direct the activities of the company in accordance with the law and the general meeting resolutions.

(2)

(Supplemented, SG 84/2000) The company shall be represented by the manager. Where several managers have been appointed each one of them may act independently, unless the articles provide oth6erwise. Other restrictions to the representative power of the manager shall not have effect for third parties.

(3)

(Amended, SG 84/2000) In the commercial register shall be registered the name of the manager, who shall present a notary certified consent with a  specimen of the signature. The registration shall be published in the State Gazette.

Prohibition on Competition
Article 142

(1)

Without the consent of the company the manager may not:

1.

effect commercial transactions in his own or in a third party's name;

2.

participate in partnerships and partnerships limited by shares, and in limited liability companies;

3.

hold positions in managing organs of other companies.

(2)

The limitations under paragraph 1 shall apply when the activities carried out are similar to those of the company.

(3)

For violations of his obligations under paragraph 1 the manager, when not a partner, may be dismissed without notice and without compensation. He shall owe compensation for damages caused to the company.

Company Books
Article 143

(1)

The company shall keep a book of interests and minutes book on the general meeting resolutions.

(2)

The value of each partner's interest, the payments made and all relevant changes thereto shall be recorded in the book of interests.

(3)

The manager shall be responsible for the regular keeping of the company books.

Comptroller
Article 144

(1)

The articles may provide for the appointment of a comptroller (comptrollers) who shall supervise the observance of the articles, the taking of proper care of the company's property and shall report to the general meeting.

(2)

The following may not be comptrollers:

1.

the managers, their deputies and company employees;

2.

spouses, descendants or ascendants and collateral relatives to the third degree of the persons under the preceding item;

3.

persons who with a sentence have been deprived of the right to hold a position of financial accountability.

(3)

In a single person company the comptroller shall be appointed by the owner.

Liability of the Manager and the Comptroller
Article 145

The manager and the comptroller shall be financially liable for damages caused to the company.

Auditors
Article 146

(1)

The company's annual financial statement shall be audited by one or several auditors who shall be certified public accountants.

(2)

Such audit shall be a condition for approving the annual financial statement.

(3)

The auditors shall be appointed by the general meeting before the expiration of the calendar year. They shall be liable for the proper and unbiased audit and for maintaining confidentiality.

(4)

(New, SG 84/2000) The audited  and approved annual financial statement shall be presented to the commercial register and statement concerning this shall be published in the State Gazette, unless the Law Stipulates that the annual financial statement of the company may not be audited by certified public accounts.

Management of a Single Person Limited Liability Company
Article 147

(1)

The single owner of the capital shall manage and represent the company either personally or through an appointed by it manager. In case the owner is a legal person the manager of such legal person or a person designated by him shall manage the company.

(2)

(Amended, SG 84/2000) The single owner of the capital shall resolve on the issues falling within the powers of the general meeting, and a protocol in the required form for the general meeting resolutions shall be made.

(3)

(New, SG 84/2000) The contracts between the single owner and the company in case it is represented by the single owner shall be concluded in a written form.