Applicable sanction regarding the breach of the separation of powers principle within the companies' governance
Applicable sanction regarding the breach of the separation of powers principle within the companies' governance

Summary/Abstract: Companies participate at the civil circuit by concluding legal documents. According to the principle regarding the separation of powers in the company's governance, a distinction must be made between the duties of the company's shareholders general assembly and the duties of the administrator. Thus, shareholders general assembly holds the deliberative power of the company and determines the working strategy of the company, whereas the administrator expresses, executes the will of the shareholders general assembly and concludes legal documents in the name and on the behalf of the company. Such legal documents are considered the documents of the company itself. From the perspective of the two management bodies, we can ask ourselves what is the applicable sanction when the shareholders general assembly decides to nominate a third person to represent the company for the signing of a legal document? From a certain point of view this represents an extension of the legal powers, throughout the legal documents of the company's bodies (including the shareholders general assembly's resolutions) and a breach of the exclusive duties of the administrative bodies of a company. The applicable sanction regarding such legal documents is non-existence of legal acts.

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