Hlutafélagalög

Hlutafélagalög refers to the legal framework governing limited liability companies, known as hlutafélög, in Iceland. These laws define the structure, operation, and regulation of such entities. A hlutafélag is a legal person separate from its owners, with liability limited to the amount of their investment. This separation of ownership and liability is a key characteristic.

The establishment of a hlutafélag requires at least one founder and a minimum share capital, the amount of which is stipulated by law. Founders must draw up articles of association, which detail the company's name, objectives, share capital, and management structure. The company is then registered with the Icelandic Companies Registry.

Management of a hlutafélag typically involves a board of directors and often a managing director. The board is responsible for overseeing the company's operations and strategic direction, while the managing director handles day-to-day management. Shareholders exercise their rights through general meetings, where they can vote on important company matters.

Hlutafélagalög also outline requirements for financial reporting, auditing, and the distribution of profits. Companies are generally obliged to prepare annual financial statements and, depending on their size, may require an audit. The laws aim to ensure transparency and protect the interests of shareholders, creditors, and the public. Changes to these laws can impact how businesses are formed and operated in Iceland.