Newsletter-21

87 COMMERCIAL LAW The transfer of shares shall be also annotated in the company’s share ledger. This annotation is not constitutive, but is only a neces- sary procedure to ensure transparency in company records. Conclusion In limited liability companies, in principle, capital shares can be transferred. However, a transfer is subject to several formal require- ments and conditions. Although the approval of the shareholders’ gen- eral assembly is sought, in principle, for the transfer of shares, articles of association of the company may deviate from this non-compulsory provision. With provisions to be included under the articles of associa- tion, approval requirement for share transfers may be removed, share transfers may be prohibited, and conditions for share transfers may be softened or aggravated. Issuance of registered share certificates for shares does not provide any particular convenience in terms of trans- fer, and the procedure under Article 595 of the TCC is followed. Fol- lowing the general assembly’s approval, request for registration shall be made before the trade registry by the company managers, and the transfer shall be annotated in the share ledger. The general assembly, provided that it is in compliance with the provisions of the articles of association, is entitled to reject the transfer. In the event of rejection, the transfer shall not take effect for the parties, nor for the company.