The duties of directors before the companies in accordance to the Iranian commercial law
The present article has been prepared by Iran Best Lawyer to describe The duties of directors before the companies in accordance to the Iranian commercial law. The article tries to explain the source of duties as well as their specifications.
Board of directors in Commercial Code of Iran
According to the Iranian commercial code, a commercial company shall be managed by a board of directors (“Board”). The Board itself, shall be appointed by the Ordinary General assembly which is the general assembly of the shareholders of the company.
In terms of the Joint-stock companies, the provisions of the Partially Amended Commercial Code (“PACC”) shall be applied for the different organs of the joint-stock companies including the directors of the Board.
According to Article 118 of the PACC, the directors of a company have all the authorities which are required for day to day management of the company except the duties which are exclusively under the authority and responsibility of the general assemblies.
It is noteworthy to mention that, any limitation imposed to the scope of authorities and responsibilities of the directors ratified through the resolution of the general assembly or through the provisions of the Articles of Association is merely valid in terms of the relationship between directors and shareholders, but are considered as void and null in the relationship between the company and third parties.
The Board shall appoint at least one managing director who is in charge of implementation of the instructions of the Board. Indeed, the managing director is the executer of the Board’s decisions.
However, in the event that the managing director performs the illegal decision of the Board, the latter has a joint responsibility regarding the wrongful action with the Board. Indeed, the managing director may not justify his wrongful action by claiming that the Board has passed the wrongful decision prior to the date of actual implementation.
Click on the link below to read more:
The duties of directors of companies in accordance to the commercial law
Comments
Post a Comment