!Корпоративное право 2023-2024 / 2013-study-analysis_en

Country

Do fiduciary duties

What is the relevant

Likely outcome in cases

prevent directors

“triggering event”?

covered by H-II

from entering into

particularly risky

transactions as

the one described

in H-II?

of the company.

Greece

Yes. “Prudent

No clear definition of

In the case at hand. directors

businessman”

triggering event

will probably face liability

standard continues

Prevailing view is that

towards creditors under Article

to apply in adapted

98 of the Bankruptcy Code, i.e.

the relevant point in

form. Prevailing

for causing insolvency.

time is defined by

view is that, as the

there not being a

In addition, internal liability

company

reasonable prospect

towards the company will also

approaches

for saving company

apply.

insolvency,

with “prudent

directors must take

management” (i.e.

care of creditors’

without taking

interests in priority

excessive risk)

to those of the

company and the

shareholders

Hungary

No specific rule on

No clear triggering

The directors prepared the

risk-taking.

event

transaction with the reasonable

Relevant question is

Relevant test is threat

care, but left the company

unprotected against a risk.

compliance with

of insolvency, to be

Although risk was judged to be

business judgement

assessed on the basis

low company was threatened

standards, and here

of a liquidity forecast.

with insolvency. Risk could

the determining

Factors, like the status

have been mitigated/insured

factor is whether

of the company’s

against

risks taken were

markets, business

unreasonable

trends, and various

The decision involving such a

economic factors play

risk would presumably be held

a role, too.

as exceeding “normal business

risks”. Thus, directors are to be

held failing to act in compliance

with the required duty of care

and their liability may be

established vis-á-vis the

company. If the company

entered liquidation , direct

liability vis-á-vis the creditors.

Ireland

Yes - duty to

No clear definition of

It is likely that a sympathetic

consider the

the vicinity of

approach would be taken

interests of creditors

insolvency.

considering the exceptional

will displace the

Case law suggests

nature of the fall in oil prices.

duty to act in the

that a formal

Judges are careful not to

interests of the

declaration of

second-guess business

company

insolvency or initiation

decisions with hindsight.

of insolvency

processes need not

have occurred for duty

to consider creditors’

interests to be

triggered.

Courts are, however,

pragmatic and

recognise that the

directors should not be

under a duty to cease

trading immediately

provided that there is a

chance that the

221

Directors’ Duties and Liability in the EU

Country

Do fiduciary duties

What is the relevant

Likely outcome in cases

prevent directors

“triggering event”?

covered by H-II

from entering into

particularly risky

transactions as

the one described

in H-II?

company could trade

its way out of its

difficulties.

Italy

With the exception

There is no definition

Based on the facts of the case,

of gross negligence

of ‘vicinity of

the conditions for a duty to

(eg. Cass.8 May

insolvency’ under

apply for insolvency

1991 n. 5123 in

Italian law and it is

proceedings had not been met.

Foro it, 1992, I,

unlikely that a director

The directors’ decision was

817), Italian courts

can be considered to

difficult and risky, but would

will not second-

have a duty to protect

probably be acceptable on the

guess managerial

the interests of

basis of the market conditions

decisions. However,

creditors before (some

at the time when it was made.

duty of care

or all of) the

standard applies.

requirements for an

insolvency declaration

are present.

Netherlands

There is no specific

No formal change of

In this case the risk seems to be

regulation in Dutch

duty of company

rather calculated and it is

law preventing

directors from

unlikely that directors would be

directors from

shareholder interests

held liability for the

entering into

to creditors’ interests,

consequences of the sudden

particularly risky

in the vicinity of

sovereign debt crisis and the

transactions.

insolvency.

worldwide economic crisis

Case law suggests,

following from that.

however, that at a

This, however, depends on the

moment where

level of predictability of the

directors should have

crisis, as assessed by a careful

realised that the

company director at the time the

company will not be

transaction was entered into.

able to meet its future

obligations, the

directors are liable

under tort law

principles

Poland

This is being

No specific new duties

Most likely no liability based on

discussed in legal

or rules that apply in

facts described in Hypothetical

literature. The

the vicinity of

II

current consensus

insolvency (apart from

seems to be that

duty to convene the

even very risky

general meeting)

transactions

entered into by a

still-solvent

company do not

lead to liability of

directors

Portugal

Duties of directors

No express

Most likely no liability, if

only prevent them

acknowledgement of

decision was taken in an

from entering into

vicinity of insolvency

informed way, free of any

transactions or

duties

personal interest and according

taking decisions

No specific legal

to the standard of

involving

“entrepreneurial rationality”

provision directly

disproportionate or

providing for a shift of

unreasonable risks

directors’ duties

towards creditors

Romania

No

Romanian law does

No liability. Provided the other

Country

Do fiduciary duties

What is the relevant

Likely outcome in cases

prevent directors

“triggering event”?

covered by H-II

from entering into

particularly risky

transactions as

the one described

in H-II?

Business judgement

not modify directors’

conditions are met, directors will

rule continues to

duties in the vicinity of

be protected by business

apply. As long as

insolvency. Remedies

judgement rule as long as risk-

risk-taking is not

operate only upon

taking was not “unreasonable”.

unreasonable, no

company is insolvent.

Liability will not arise unless and

prima facie

Law does not require

until the company is insolvent.

restrictions in

directors to act in the

Directors may, but are not

relation to risk-

interest of creditors

obliged to file for insolvency

taking, even in

before company

proceedings where insolvency

near-insolvent

enters into insolvency

is “imminent”

companies

Slovenia

No specific rule on

Slovenian company

Unclear whether liability would

risk-taking.

law does not define a

exist – this depends on the

Relevant question is

point in time after

assessment of the directors’

which duties are

action against the general care

compliance with

applied differently

standard.

duty of care, and

liability arises where

insolvency has

been caused in

breach of this duty

Spain

No specific rule on

Spanish law does not

Liability would most likely not

risk-taking

provide additional

arise, unless “recapitalise or

general duty of care

duties in situations of

liquidate” rule has not been

complied with.

continues to apply

financial distress.

Duties continue to

apply in the vicinity of

insolvency without

significant adjustments

A so-called

“suspicious period”, is,

however, recognised,

covering the two years

preceding the opening

of the insolvency. A

special liability applies

for certain actions

during that time, but

no liability is created

for actions that would

not also have been

illegal in solvent

company.

United

Yes - when a

The law remains

On these facts the risk of failure

Kingdom

company is

somewhat unclear on

that is apparent would mean

operating in the

what is the “verge” of

that the interests of creditors

zone of /

insolvency and in what

would intrude. However, the

approaching cash-

ways creditors

business judgment taken to buy

flow insolvency the

interests are taken into

the futures would be judged

duties owed to the

account in this zone

according to the section 172

company (s172

(priority versus

standard which is a subjective

Companies Act

plurality).

standard (in practice a

2006) become

rationality standard). There

duties to promote

appeared at the time to be a

the success of the

sound basis for this decision,

Country

Do fiduciary duties

What is the relevant

Likely outcome in cases

prevent directors

“triggering event”?

covered by H-II

from entering into

particularly risky

transactions as

the one described

in H-II?

company for the

accordingly there would be no

benefit of both

breach. In relation to the duty of

creditors and

care the facts suggest that due

shareholders and to

care was taken which would

take due care in so

comply with the UK’s dual

doing.

subjective / objective care

Once company is

standard.

insolvent those

Wrongful trading: although

duties are then to

wrongful trading could provide a

promote the

remedy when taking risky

interests of the

decisions in the zone of

creditors alone and

insolvency, the facts suggest

to take care in so

(low probability of price drop)

doing

that this would not provide a

remedy in this context. The

remedy imposes creditor

regarding obligations when a

director should have realised

there was no way of avoiding

insolvent liquidation. The law

has not attempted to define the

probability of avoidance

required by this provision. The

low probability suggested in the

facts would not be sufficient.

Country

Primary

Did the

Rule dependent

Remarks

connecting

position

on company

factor?

change as a

falling under Art

consequence

54 TFEU?

of the

jurisprudence

of the Court

of Justice of

the European

Union?

real seat

(headquarter,

jurisdiction in

no explicit

which central

change, but

effectively yes,

business

direct

since courts cannot

statutory rule; not applied by

decisions are

applicability of

apply statutory

courts to companies falling under

made and

Treaty leads to

rules to Art 54-

Art 54 TFEU since Centros

Austria

implemented)

changed result

companies

decision of the ECJ

statutory rule; renvoi possible;

courts will not normally apply the

statutory rule to companies falling

no explicit

under Art 54 TFEU (disputed)

change, but

effectively yes,

The transfer of a company’s “real

direct

since courts cannot

seat” in combination of a re-

real seat

applicability of

apply statutory

registration without dissolution (as

("principal

Treaty leads to

rules to Art 54-

required by the Treaty) is

Belgium

establishment")

changed result

companies

recognised.

incorporation doctrine had already

incorporation /

applied before Bulgaria joined the

Bulgaria

registration

no

no

EU

incorporation /

Croatia applies the incorporation

Croatia

registration

no

no

doctrine to all foreign entities

Follows the common law tradition

in referring to the country of

incorporation;

incorporation /

National companies are not

Cyprus

registration

no

no

restricted in moving their

225

Directors’ Duties and Liability in the EU

administrative seat out of Cyprus.

While the applicable law is

determined based on the place of

incorporation, certain substantive

law rules apply to foreign

incorporated entities.

National companies are not

restricted in moving their

Czech

incorporation /

administrative seat out of the

Republic

registration

no

no

Czech Republic.

“Scandinavian version” of

incorporation theory, but Danish

companies are required to have

and maintain a "real link" with

Denmark for Danish company law

to apply; Centros, which

not in relation

concerned a UK company

to the private

established by Danes, rendered

incorporation /

international

inapplicable an "outreach"-type294

Denmark

registration

law rule

no

statute

Traditionally applied real seat

Estonia

real seat

yes

Yes

doctrine

incorporation /

“Scandinavian version” of

Finland

registration

no

no

incorporation theory.

The primary connecting factor is

the statutory seat. Specific

provisions of French law can

apply to companies having their

real seat in France (based on

unclear; no

residence of directors and place

of decision-making), however.

change of the

This is decided on a case by case

statutory rule,

basis. The few cases so far dealt

and

with criminal law liability. The

depending on

main reasoning behind the

interpretation

application of French law to

of the rule by

foreign entities seems to be an

the courts, the

attempted "escape" from French

application of

no, although this

law; as such, this may also apply

French law to

may ultimately

to directors' duties.

foreign

depend on the

companies

courts'

In any event, moving the real seat

may be

interpretation of

into France does not lead to

compatible

the "no escape"

automatic dissolution, but may

France

mixed

with the Treaty

doctrine

trigger requirement to re-register

real seat

No explicit codified rule, but

(headquarter,

prevailing view in both court

jurisdiction in

yes, but some

opinions and scholarly writing.

which central

Not applied by courts to

lower courts have

business

companies falling under Art 54

applied this to non-

decisions are

TFEU since Centros decision of

Germany

yes

EU companies, too

made and

the ECJ

implemented)

German private limited

companies may locate their real

seats outside Germany while

remaining subject to German

law.295

yes, but also

applies to

shipping companies and

companies formed

companies formed in certain

under the laws of

countries with which special

certain other

treaties have been concluded are

countries (including

exempted from the application

the US) and to

from the real seat doctrine. This

companies in

also applies to Art 54-companies

certain business

due to the direct applicability of

sectors - in

the Treaty; no change of statutory

particular to

law.

shipping

National companies can still move

Greece

real seat

yes

companies

their real seat out of Greece

Hungary applies the incorporation

doctrine to all foreign-

incorporated companies

Hungary previously required that

companies established under

Hungarian law maintain their real

seat in Hungary.296 This

incorporation /

requirement has since been

Hungary

registration

no

no

abolished.297

Generally follows the common

law tradition in referring to the

country of incorporation.

In relation to some matters,

position is somewhat unclear: The

duty of care in tort (but not the

equitable duty of care) will be

governed based on the proper

law of the tort based on the place

where the substance of the tort

arose, and may thus apply to

companies incorporated abroad.

National companies are not

incorporation /

limited in moving their

Ireland

registration

no

no

administrative seat out of Ireland.

The primary connecting factor is

the statutory seat. However,

Italian company law applies to

companies having their real seat

("principal activity) in Italy,

irrespective of the state of

incorporation. This does no longer

Italy

mixed

yes

yes

apply to Art 54-companies,

although certain mandatory Italian

law rules may continue to apply to

such entities (where compatible

with the Treaty), including criminal

law rules. No change of statutory

rules as a consequence of

Centros, but courts will not apply

Italian company law to foreign EU

companies

Latvia

real seat

yes

yes

Lithuania

real seat

yes

yes

National companies

can

move

their administrative seat out of

Luxembourg despite

real

seat

Luxembourg

real seat

yes

yes

approach.

Incorporation

no

no

Follows the common law tradition

theory

in referring to the country of

incorporation. National companies

are not limited in moving their

Malta

administrative seat out of Malta.

Adopted incorporation theory in

1959.298

The Foreign Companies Act

continues to apply, but since

not in relation

Inspire Art no longer applicable to

to the private

Art 54-companies. The conflict of

incorporation /

international

law rule has not been affected by

Netherlands

registration

law rule

no

the jurisprudence of the ECJ

Polish private international law

has recently been changed

(2011). The new provisions define

the seat of the company as the

connecting factor, but do not

define the concept of the "seat".

The emerging consensus among

legal scholars seems to interpret

the "seat" as a reference to the

place of incorporation, which

would mark a deviation from the

traditional real seat doctrine

applied in Poland. However, this

has not yet been tested in the

courts. In relation to Art 54-

companies, the consensus

among legal scholars is that only

the place of incorporation should

be taken into account in

Poland

unclear

yes

unclear

determining the applicable law

No change of statutory law, but

accepted by courts that real seat

doctrine cannot be used to

impose Portuguese company law

Portugal

real seat

yes

yes

on Art 54-companies. Third

parties may rely on the

application of the law of

incorporation irrespective of the

real seat.

Companies have to accept being

subjected to incorporation law in

dealings with third parties. In

addition, companies with their real

seat in Portugal are under an

obligation to incorporate under

Portuguese law.299

incorporation /

Romania

registration

no

no

incorporation /

Slovakia

registration

no

no

Slovenia

real seat

probably yes

yes

not applied to Art 54-companies

The position of Spain is not

entirely clear. The majority

opinion seems to be that the

domicilio of a company – the

determining factor for the

applicable law – is equivalent to

the country of incorporation.

Some scholars take the view,

however, that the domicilio is to

be interpreted as the location of

its central administration.

Companies incorporated in Spain

are subject to Spanish law

irrespective of the location of their

Spain

mixed form

probably yes

yes

central administration.

incorporation /

“Scandinavian version” of

Sweden

registration

no

no

incorporation theory.

United

incorporation /

Incorporation doctrine tradition

Kingdom

registration

no

no

based on common law

Legend

Country

Real seat doctrine

AT, BE, BG, HR, EE, EL, DE, LV,

LT, LU, MT, SI

Incorporation doctrine

CZ, DK, FI, HU, IE, NL, RO, SE,

SK, UK

Mixed approach

FR, ES, IT, PT

Unclear

PL