Review article
Position of Board Members of a Corporation in entering into Contracts on behalf of the Corporation, but with a Personal Interest in the Legal Transaction
Mihaela Braut Filipović
; Faculty of Law, University of Rijeka, Rijeka, Croatia
Abstract
This paper deals with the permissibility of self-dealing transactions of corporation board members when entering into contracts with themselves or concluding contracts on behalf of the corporation, but with a personal interest. An overview of comparative solutions is presented, including those from European law, regarding measures aimed at preventing board members from entering into self-dealing transactions damaging to the corporation. There is no doubt, in both Croatian and comparative law, about the fact that corporation board members must act in the interest of the corporation. However, the absence of an absolute ban on self-dealing transactions for board members raises the issue of limits within which such legal transactions may be permissible. The question of establishing an efficient system to control such transactions is also raised. The article further presents possibilities of using the articles of association and group representation for the purpose of exerting control over self-dealing transactions entered into by board members.
Keywords
company law; self-dealing transactions; contracts with personal interest entered into by board members; board members entering into contracts with themselves; group representation in corporations; articles of association
Hrčak ID:
94481
URI
Publication date:
19.10.2012.
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