!Корпоративное право 2023-2024 / 2013-study-analysis_en
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competition), but it |
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derives from |
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general fiduciary |
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principles |
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Greece |
- The duty of |
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Application of the |
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loyalty can be |
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general principle |
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derived from Art. |
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of good faith and |
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22a(3): directors |
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the prohibition of |
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have a duty to |
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abusive behaviour |
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manage corporate |
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laid down in Art. |
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assets in the best |
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288 Civil Code |
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interests of the |
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company; this |
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encompasses the |
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requirement to |
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avoid any action |
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that could conflict |
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with the corporate |
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interests or |
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obstruct the |
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corporate |
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objectives |
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- In addition, |
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specific aspects of |
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the duty of loyalty |
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are expressly |
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regulated, e.g. |
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non-competition |
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(Art. 23) or related |
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party transactions |
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(Art. 23a) |
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Hungary |
The general duty |
Principles of |
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of loyalty is not |
general civil law |
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regulated in the |
apply (law of |
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Companies Act, |
service |
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only certain cases |
contract/breach of |
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of conflicts of |
contract) |
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interest |
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Ireland |
Generally no, but |
Yes, comprising |
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some rules in Part |
three elements: |
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3 of the |
1) duty to act in |
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Companies Act |
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the best interest of |
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1990 |
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the company |
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2) duty to act for |
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proper purposes |
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3) duty to avoid |
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conflicts of |
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interests and |
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secret profits |
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Italy |
1) General duty to |
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act in good faith |
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when fulfilling |
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contractual |
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obligations, Arts. |
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1175, 1375 Civil |
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121 |
Directors’ Duties and Liability in the EU |
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Code |
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2) Self-dealing, |
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Art. 2391 Civil |
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Code |
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3) Corporate |
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opportunities, Art. |
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2391(5) Civil |
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Code |
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Latvia |
Some aspects of |
Yes, derived from |
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the duty of loyalty |
the law of agency |
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regulated in the |
(Civil Code, s. |
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Commercial Law, |
2304) and the |
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e.g. the duty to |
fiduciary nature of |
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disclose conflicts |
the director’s role |
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of interest (s. |
as an agent |
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309(3)) |
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Lithuania |
Yes, Civil Code, |
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Art. 2.87: |
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1) duty to act in |
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good faith |
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2) duty of loyalty |
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3) duty to avoid |
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conflicts of |
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interest |
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4) duty to avoid |
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commingling the |
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property of the |
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company and |
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private property |
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5) duty to declare |
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interest in |
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proposed |
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transactions |
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Luxembourg |
Some aspects of |
General duty of |
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the duty of loyalty |
loyalty derives |
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regulated in the |
from the position |
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Companies Act, |
of the director, the |
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e.g. the duty to |
agency |
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disclose conflicts |
relationship |
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of interest (Art. |
between the |
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57) |
director and the |
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company, Art. 59 |
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Companies Act, |
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and Art. 1134 Civil |
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Code (duty of |
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parties to a |
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contract to |
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execute their |
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obligations under |
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the contract in |
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good faith) |
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Malta |
Yes, Companies |
General fiduciary |
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Act, Art. 136A: |
obligations laid |
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1) Duty to act |
down in the Civil |
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122 |
Directors’ Duties and Liability in the EU |
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honestly and in |
Code also apply, |
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good faith in the |
but they largely |
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best interests of |
overlap with Art. |
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the company, Art. |
136A Companies |
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136A(1) |
Act |
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2) Duty not to |
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make profits from |
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the position of |
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director, Art. |
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136A(3)(b) |
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3) Duty to ensure |
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that their personal |
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interests do not |
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conflict with the |
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interests of the |
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company, Art. |
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136A(3)(c) |
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4) Duty not to use |
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any property, |
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information or |
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opportunity of the |
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company for their |
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own benefit, Art. |
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136A(3)(d) |
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Netherlands |
s. 2:146: in case |
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A director who is |
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the company has |
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prohibited from |
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a conflict of |
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acting because of |
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interest with one |
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a conflict of |
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or more directors, |
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interest (see left) |
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the company is |
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may be liable to |
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represented by its |
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third parties on |
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supervisory |
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the basis of tort |
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directors. |
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law (s. 6:162) |
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The conflicted |
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director who |
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nevertheless |
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represents the |
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company is liable |
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pursuant to s. 2:9 |
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to the company |
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Poland |
No, but some |
The duty of loyalty |
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statutory |
derives from the |
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provisions are |
fiduciary |
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considered as |
relationship |
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expressions of the |
between the |
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duty of loyalty |
company and the |
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(e.g., Arts. 15, 370 |
director and |
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Code of |
provisions in the |
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Commercial |
Code of |
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Companies). |
Commercial |
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Liability for breach |
Companies |
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of the duty of |
prohibiting specific |
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loyalty is based on |
types of action, |
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the general |
e.g. the duty not |
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liability provisions |
to compete with |
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of Art. 483 CCC or |
the company |
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123 Directors’ Duties and Liability in the EU
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Art. 415 Civil |
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Code (tort law) |
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Portugal |
Yes, Art. 64(1)(b) |
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Code of |
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Commercial |
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Companies |
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Romania |
Yes, Art. 144 |
Initially fiduciary |
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Companies Act |
principles arising |
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from the law on |
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agency, but since |
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2006 codified in |
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the Companies |
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Act |
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Slovakia |
Derived from s. |
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194(5) |
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Commercial Code |
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Slovenia |
Companies Act: |
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- General duty to |
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avoid conflicts of |
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interest and |
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regulation of |
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related party |
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transactions, Art. |
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38a |
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- Duty of non- |
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competition, Art. |
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41 |
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- Confidentiality, |
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Art. 263(1) |
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Spain |
Yes, regulated in |
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the LSC are: |
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1) General duty of |
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loyalty, s. 226 |
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2) Prohibition to |
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use the company |
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name, s. 227 |
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3) Prohibition to |
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take advantage of |
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business |
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opportunities, s. |
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228 |
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4) Conflict of |
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interest, s. 229 |
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5) Duty of non- |
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competition, s. |
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230 |
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Sweden |
The duty of loyalty |
Not all of the |
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is set forth in the |
duties of the |
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general clause of |
directors can be |
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Ch. 8 § 34 in the |
determined on the |
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Companies Act, |
basis of the |
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providing that the |
Companies Act. |
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board and the |
The mandate of a |
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124 Directors’ Duties and Liability in the EU
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managing director |
board member is |
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may not |
accompanied by |
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undertake |
the general duty |
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measures which |
of loyalty towards |
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might provide an |
the company. |
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undue advantage |
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to a shareholder |
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or other person to |
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the disadvantage |
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of the company or |
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another |
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shareholder. |
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United Kingdom |
Now statutory |
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corporate law, in |
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particular: |
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1) Duty to avoid |
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conflicts of |
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interest, s. 175 |
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2) Duty to declare |
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interest in |
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proposed |
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transaction, s. 177 |
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Discussion
The duty of loyalty is less coherently regulated in the Member States than the duty of care.149 Most Member States contain at least some express rules on transactions of the director with the company, corporate opportunities, and/or competitive behaviour by the director. However, the express rules on conflict of interest situations are only in a few, if any, cases exhaustive.150 This does not necessarily indicate gaps in the legal system, because all jurisdictions are familiar with fiduciary principles derived from general civil law, for example the law on agency. These fiduciary concepts inform much of corporate law and can be relied on where the rules on directors' duties do not address a particular conflict. Indeed, this is what we observe in several jurisdictions, notably Cyprus and Ireland, but also civil law jurisdictions such as France, Germany, Hungary, Latvia, and Poland. Legal systems with a two-tier board structure often also use the allocation of authority between the different organs as a mechanism to alleviate conflicts of interest, which explains the absence of some rules regulation conflicted interest situations in such jurisdictions that are found in one-tier board systems.
Two interesting cases are the Netherlands and Finland, both jurisdictions with a fragmentary regulation of the duty of loyalty. In these two Member States, the courts have built on the general formulation of the directors’ position as set out in the companies act and utilised duties not specifically designed to address related party transactions and corporate opportunities. The relevant Dutch rules require directors to act 'in accordance with what is required by standards of reasonableness and fairness'151 and provide that they shall be liable 'for a proper performance of the tasks assigned' to them.152 The Finnish rule requires managers to 'act with due care and promote the interests of the company.'153 Thus, the courts have displayed some ingenuity in finding solutions where the law did not provide an explicit answer.
149See above Table 2.4.1.a.
150The most comprehensive regulation can be found in modern codifications of company law, such as the Spanish Corporate Enterprises Act of 2010 or the UK Companies Act 2006.
151Dutch Civil Code, s. 2:8(1).
152Dutch Civil Code, s. 2:9(1). For an application of these provisions to the conflict of interest context see below n Error! Bookmark not defined..
153Companies Act, Ch. 1, s. 8.
125 Directors’ Duties and Liability in the EU
While the dogmatic foundations, therefore, do not seem to be decisive for a comprehensive regulation of conflicts of interest, it may be the case that narrowly tailored rules are more effective in preventing violations and ensuring legal certainty. We will discuss below how the different approaches compare with each other and where deficiencies may exist.
2.5.2 Behavioural expectations
Summary of the country reports
Table 2.5.2.a: Behavioural expectations in a conflict of interest case
Country |
Requirements |
Requirements |
Resigning |
Other |
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for self-dealing |
for corporate |
directors |
behavioural |
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opportunities |
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expectations |
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Austria |
The supervisory |
s. 79: duty not to |
s. 79 (non- |
Confidentiality, s. |
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board represents |
compete → |
competition): duty |
84(1) last |
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the company in |
1) Members of the |
generally ends |
sentence: duty not |
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dealings with the |
when the director |
to reveal business |
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management |
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members of the |
ceases to be a |
secrets; this duty |
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board may not |
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management |
director |
extends beyond |
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operate another |
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board, s. 97 AktG |
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the end of the |
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business; |
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director’s term in |
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2) be member of |
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office |
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another |
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company’s |
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supervisory board; |
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3) be a personally |
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liable partner of |
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another business |
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association; |
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4) enter into |
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transactions in the |
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company’s line of |
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business; |
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--unless |
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authorised by the |
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supervisory board |
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(authorisation in |
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the articles or by |
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shareholder |
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resolution not |
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sufficient) |
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Belgium |
Art. 523 CC: |
- No specific |
- The duty of |
Duty to act in |
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1) Ex ante |
corporate |
loyalty ends when |
good faith, which |
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opportunities |
the service |
also gives rise to |
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disclosure to the |
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regulation in the |
contract ends. |
the duty not to |
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board and auditor |
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Companies Code. |
However, non- |
compete and the |
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2) The conflicted |
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The literature has |
compete clauses |
duty of |
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director does not |
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may be construed |
confidentiality |
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developed a |
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need to abstain |
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to apply after |
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corporate |
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from voting, |
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resignation. |
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opportunities |
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unless the |
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doctrine based on |
- Resignation can |
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company has |
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the general duty |
in itself be a basis |
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issued securities |
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to act in good faith |
for liability if it is |
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to the public |
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(which comprises, |
given in an |
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(which includes |
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for directors, a |
untimely and |
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126 Directors’ Duties and Liability in the EU
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listed companies) |
duty of loyalty) |
harmful way, but |
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3) |
and inspired by |
no case law exists |
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Anglo-Saxon tests |
on this point |
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Notwithstanding |
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(business line, |
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compliance with |
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etc.), but opinion |
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Art. 523, liability is |
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differs as to the |
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triggered if the |
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exact scope of the |
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transaction results |
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doctrine and there |
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in an ‘abusive’ or |
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is no established |
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‘excessive’ |
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case law. |
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advantage to the |
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director (e.g., |
- Enforcement has |
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misuse of assets), |
to rely on the |
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Art. 529 CC |
general rules of |
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Art. 527 CC |
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- Possibly |
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application of the |
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conflicts of |
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interest regime or |
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the prohibition of |
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‘abuse of |
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company assets’ |
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Bulgaria |
s. 240b: |
1) Duty of non- |
Only the duty of |
1) Disclosure of |
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1) Directors must |
competition, s. |
confidentiality |
conflicts of |
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237(4): |
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applies after |
interest, s. 237(3): |
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inform in writing |
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resignation |
A person |
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the board of |
- Directors shall |
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nominated as |
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directors (or the |
not execute |
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director must, |
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management |
business |
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prior to his |
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board in two-tier |
transactions or |
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election, notify the |
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systems) when |
participate in |
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general meeting |
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they (or related |
companies as |
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or the supervisory |
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persons) enter |
managers or |
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board of his |
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into a contract |
board members if |
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participation in |
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with the company |
this would |
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any companies as |
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that goes beyond |
constitute a |
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an unlimited |
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its usual business |
competitive |
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liability partner, of |
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or materially |
activity |
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holding over 25 |
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deviates from |
- Competitive |
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per cent of the |
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market terms |
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activity: the |
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equity in any other |
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2) The board of |
transaction must |
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company, and of |
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directors (or |
fall within the |
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his participation in |
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management |
actual line of |
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the management |
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board) decides |
business of the |
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of other |
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about the |
company; it is not |
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companies. When |
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conclusion of such |
sufficient if it falls |
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these |
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contracts. The |
within its |
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circumstances |
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interested director |
objectives as |
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arise after the |
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cannot vote or |
specified in the |
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election, the |
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participate in the |
articles |
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director must |
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decision-making |
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- Exception: if the |
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issue a written |
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process. |
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articles of |
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notice |
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association allow |
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2) Confidentiality, |
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the competitive |
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s. 237(5) |
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activity expressly, |
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or the body which |
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elects the board |
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member has given |
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127 |
Directors’ Duties and Liability in the EU |
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its express |
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consent (this is in |
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one-tier systems |
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the GM and in |
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two-tier systems |
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the supervisory |
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board) |
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2) Very little case |
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law and no |
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developed |
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corporate |
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opportunities |
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doctrine |
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||
Croatia |
Supervisory board |
1) Prohibition of |
Unclear |
General unwritten |
|
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|
|
represents |
competition, s. |
|
duty of loyalty |
|
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company in |
248: without the |
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dealings with the |
consent of the |
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management |
supervisory board, |
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board |
a member of the |
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management |
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board cannot, |
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either for his |
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account or for the |
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account of others, |
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perform activities |
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pursued by the |
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PLC, act as a |
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member of the |
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management or |
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supervisory board |
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in another |
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company engaged |
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in business similar |
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to that of the PLC, |
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or use the PLC’s |
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premises to |
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conduct any |
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business. Without |
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such consent, the |
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director also |
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cannot be a |
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member of |
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another company |
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or be personally |
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liable for its |
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obligations if that |
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company |
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performs the |
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same activities as |
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the PLC in |
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question. |
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2) Directors are |
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required not to |
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use confidential |
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information, |
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acquired in the |
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course of their |
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128 |
Directors’ Duties and Liability in the EU |
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duty, for their |
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personal benefit |
|
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|
||
Cyprus |
- s. 191 CA: |
- Directors must |
No provision |
1) Duty to act in |
|
||
|
|
directors who are |
not make use of |
under Cyprus law |
good faith for the |
|
|
|
|
directly or |
the company’s |
on the |
benefit of the |
|
|
|
|
indirectly |
property or any |
continuation of the |
company and |
|
|
|
|
interested in a |
information and |
duty of a director |
exercise their |
|
|
|
|
contract or |
not to make use of |
powers for the |
|
||
|
|
opportunities |
|
||||
|
|
proposed contract |
corporate |
purposes for |
|
||
|
|
which arise from |
|
||||
|
|
with the company |
opportunities even |
which they were |
|
||
|
|
holding office |
|
||||
|
|
must declare the |
after his |
conferred: |
|
||
|
|
- Cypriot courts |
|
||||
|
|
nature of their |
resignation as |
subjective test |
|
||
|
|
may apply the |
|
||||
|
|
interest at a |
director, or for the |
2) Duty not to put |
|
||
|
|
English |
|
||||
|
|
meeting of the |
continuation of |
|
|||
|
|
themselves in a |
|
||||
|
|
precedents |
|
||||
|
|
board of directors; |
any other |
|
|||
|
|
position where |
|
||||
|
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|
|||
|
|
s. 191 does not |
|
|
director’s duty |
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|
|
their own interest |
|
||
|
|
require the |
|
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after resignation |
|
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|
|
conflicts with the |
|
||
|
|
interested director |
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|
interests of the |
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|
from abstaining |
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company: no |
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|
from voting, but |
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violation if the |
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the articles |
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company |
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commonly contain |
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consents after full |
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such a provision |
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and proper |
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- Failure to comply |
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|
disclosure |
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|
|
with s. 191 |
|
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|
renders the |
|
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|
|
agreement |
|
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|
|
voidable, but it |
|
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|
may be accepted |
|
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|
by the company in |
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|
general meeting |
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|
||
Czech Republic |
1) s. 196a(1), (2) |
s. 196(1) |
No rules dealing |
Confidentiality, s. |
|
||
|
|
Commercial |
Commercial |
with resigning |
194(5) |
|
|
|
|
Code: credit or |
Code: duty not to |
directors |
|
|
|
|
|
loan contract with |
compete → |
|
|
|
|
|
|
directors; contract |
directors shall not |
|
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|
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|
|
securing the debts |
carry on business |
|
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|
|
of directors; free- |
activities in a |
|
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|
|
of-charge transfer |
similar line of |
|
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|
|
of property from |
business as the |
|
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|
|
the company to |
company |
|
|
|
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|
|
directors require: |
|
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|
|
a) approval by GM |
|
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|
|
b) conclusion |
|
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‘under the |
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|
|
conditions usual in |
|
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|
|
trade’ |
|
|
|
|
|
|
|
2) s. 196a(3): |
|
|
|
|
|
|
|
transfer of assets |
|
|
|
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|
|
|
for consideration |
|
|
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|
|
|
exceeding 10% of |
|
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|
|
|
the company’s |
|
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|
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|
|
|
capital requires: |
|
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|
|
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|
|
a) that the price is |
|
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|
|
determined by an |
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129 |
Directors’ Duties and Liability in the EU |
|
expert; and |
|
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|
|
b) the GM gives |
|
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|
|
ex ante consent |
|
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|
|
Does not apply to |
|
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|
|
assets acquired in |
|
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|
|
the ordinary |
|
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|
|
course of |
|
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|
|
business |
|
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|
|
Denmark |
s. 131: no |
No corporate |
Duties no longer |
Confidentiality, s. |
|
member of the |
opportunities |
apply |
132 |
|
management may |
doctrine under |
|
|
|
participate in a |
company law; only |
|
|
|
transaction that |
regulation: the |
|
|
|
involves an |
service contract |
|
|
|
agreement |
usually includes a |
|
|
|
between the |
non-competition |
|
|
|
company and that |
clause → contract |
|
|
|
member (→ strict |
law applies. In |
|
|
|
prohibition, the |
addition, the |
|
|
|
director is |
ordinary |
|
|
|
disqualified from |
standards of duty |
|
|
|
participation and |
of care and loyalty |
|
|
|
has to leave the |
may be used to |
|
|
|
meeting), or |
prevent directors |
|
|
|
between the |
from exploiting |
|
|
|
company and a |
corporate |
|
|
|
third party, if the |
opportunities. |
|
|
|
member has a |
|
|
|
|
material interest in |
|
|
|
|
the transaction |
|
|
|
|
and that material |
|
|
|
|
interest could |
|
|
|
|
conflict with the |
|
|
|
|
interests of the |
|
|
|
|
company (e.g., |
|
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|
|
the director is a |
|
|
|
|
major shareholder |
|
|
|
|
in a company that |
|
|
|
|
transacts with the |
|
|
|
|
director’s |
|
|
|
|
company; no |
|
|
|
|
further case law |
|
|
|
|
definition of |
|
|
|
|
“material interest” |
|
|
|
|
and “conflict with |
|
|
|
|
the interests of the |
|
|
|
|
company”) |
|
|
|
|
|
|
|
|
Estonia |
The supervisory |
Commercial |
Duties no longer |
- Confidentiality: |
|
board represents |
Code, § 312: duty |
apply (except the |
Commercial |
|
the company in |
of non- |
duty not to |
Code, § 313(1) |
|
dealings with the |
competition. |
disclose the |
- Prohibited loans: |
|
members of the |
|
company’s |
|
|
Without the |
Commercial |
||
|
management |
business secrets) |
||
|
consent of the |
Code, § 281 |
||
|
board, |
|
||
|
supervisory board, |
|
(loans of the |
|
|
Commercial |
|
||
|
a member of the |
|
company to the |
|
|
Code, § 317(8) |
|
||
|
management |
|
directors are |
|
|
|
|
||
|
|
|
|
|
130 Directors’ Duties and Liability in the EU