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

Author:Simona Chirica
Position:Law Department, Bucharest University of Economic Studies
Pages:220-232
SUMMARY

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... (see full summary)

 
FREE EXCERPT
Applicable sanction regarding the breach of the separation of powers
principle within the companies' governance
Lecturer Simona CHIRICĂ
1
Abstrac t
Compan ies part icipate at the civil circuit by conclu ding legal docu ments.
Accordi ng to the prin ciple regardi ng th e separa tion of pow ers in the company 's
govern ance, a distinctio n must be made between the duties of the compa ny's sharehol ders
genera l assembly and th e duties of the admin istrator. Thus, shareh olders genera l assembly
hold s the delib erative po wer of th e company and d etermines the workin g strateg y of the
compan y, whereas th e administra tor expresses, ex ecutes the wi ll of t he shareholde rs
genera l assembl y and conc ludes legal documents in the name a nd on the beha lf of the
compan y. Such l egal do cuments are con sidered the do cuments of the compan y itself. From
the persp ective of the two manag ement bodies, we can ask ourselves wha t is the appl icable
sancti on wh en t he sha reholders g eneral asse mbly decides to nomina te a th ird person to
represent the co mpan y for the signing of a le gal doc ument? From a certain point of view
this represents an extensio n of the legal powers, througho ut the legal d ocuments o f th e
compan y's bodies (inclu ding the sharehold ers genera l assembly's resolu tions) and a breach
of the exclusive duties of the admini strative bod ies of a company. The app licable san ction
regardi ng such lega l documents is no n-existence o f legal acts.
Keywords: compani es' g overnance, trad e law, sharehold ers, th e separation o f
powers pri nciple.
JEL Cla ssification: K22
1. Preliminary issues
Any legal entity participates at the civil circuit by concluding legal
documents. In order to comply with their activity object, companies are also
participants of this civil circuit. In this regard, companies must fulfill certain
obligations under Law no.31/1990 regarding the Law of Companies, republished
including the subsequent amendments and inclusions ("Companies' Law")
2
, as
well as the provisions under the New Civil Code ("NCC")
3
. To be more precise,
companies must comply with the legal provisions regarding (i) incorporation,
(ii) registration, (iii) functioning, (iv) dissolution, merger and demerger of the
1
Simona Chirică - Law Department, Bucharest University of Economic Studies,
s.chirica@schoenherr.ro .
2
Law no. 31/1990- Companies' Law, p ublished in t he Official G azette of Romania, no. 126-127
dated 17.11.1990
3
Romanian Civil Code, p ublished in the Official Gaz ette of Romania, no 511 dated 24.07.2009.

To continue reading

REQUEST YOUR TRIAL