Section II Incorporation

(1)

The joint stock company shall be constituted on a constituent meeting where participants shall be all persons that register shares. A proxy having written explicit letter of attorney with a notary certified signature might represent a founder at the constituent meeting.

(2)

Shares shall be registered at the constituent meeting.

(3)

The constituent meeting shall:

1.

adopt a resolution on incorporating the company;

2.

adopt the by-laws;

3.

establish the size of the of the expenses on constitution;

4.

appoint a supervisory board or, respectively, a board of directors.

(4)

The resolutions on items 1-3 of the preceding paragraph shall be adopted unanimously and a protocol shall be issued for which Art. 232 shall apply.

(5)

In case a joint stock company is founded by one person, shall be issued a constituent act.

The by-laws shall contain:

1.

the trade name, the seat and the registered office of the company;

2.

the purposes and the term, if any;

3.

the amount of the capital stock, the type and number of shares and the nominal value of each share;

4.

the company's bodies and their mandate and number of members;

5.

the type and value of the non-monetary contributions, if any, the persons making them, the number and nominal value of the shares which they shall receive;

6.

the advantages, if any, which the said founders, by name, have reserved for themselves; if suc are stipulated;

7.

the founders' right to appoint the first supervisory board or board of directors of the company and to determine its mandate, if such a mandate is foreseen,;

8.

the way of the profit distribution;

9.

the way of convening the general meeting;

10.

other terms with respect to the incorporation, existence and dissolution of the company.

(1)

(Amended - SG  84/2000) Monetary installments shall be made to a bank account of the company opened by the managing board, respectively the board of directors, with an indication of the name of the payer, and any payments with deposited sums shall be effected with unanimous decision of the said body.

(2)

The provisions of Articles 72 and 73 shall apply mutatis mutandis to non-monetary contributions.

(3)

(New, SG 84/2000) If within 3 months term managing board, respectively the board of directors, does not certify to the bank that the company has been claimed for registration, the payers can draw back the full size of the installments.

(1)

(Amended - SG  84/2000) The shareholders receive interim certificates signed by an authorized member of the managing board,  respectively the board of directors, for their installments to subscribe shares.

(2)

The shareholders shall receive their shares upon presentation of interim certificates.

The raising of capital may also be done at the constituent meeting, if the remaining requirements have been met. In this case at least two persons which have subscribed shares and which represent at least half of the subscribed capital must be present.

(1)

For the registration of a joint stock company in the commercial register it shall be necessary that:

1.

the by-laws have been adopted;

2.

the full amount of the capital stock has been subscribed;

3.

(Amended, SG 84/2000) The stipulated by the by-laws part of the value of the share to be paid up but not less than 25 per cent of the nominal or the stipulated by the by-laws emission value;

4.

the members of the board of directors or, respectively, the supervisory board have been appointed;

5.

the remaining requirements of the law have been fulfilled.

(2)

(Amended, SG 84/2000) The data pursuant to Article 165, items 1-4, 5/only the type and the value of the non-monetary installment shall be registered/ and 10 shall be entered in the commercial register and the entry shall be published. The date of the court decision for entry in the commercial register shall also be published. The constituent protocol and the list with the persons who have registered shares at the company's constitution shall be certified by the managing board, respectively the board of directors and shall be presented to the register.

(3)

(New - SG 114/1999) In order, insurance and banking transactions, acting as a investment intermediary, investment company, stock exchange to enter in the commercial register, as well as other activities for which the Law provides an accomplishment with a permission from a state body, the said permission shall be presented.

(4)

( New - SG 84/2000) In case of amendment and supplement of the company statute, the person/s representing the joint stock company shall certify a copy of the company statute with all the amendments and supplements by the respective date and shall present it at the commercial register.

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