Appointment and removal

How are directors removed?

Any member of the board of directors may be dismissed (either with cause, or without cause) at any time by means of a resolution approved by the company's shareholders (via a shareholders' general meeting or by unanimous written resolution).

A director may also resign at any time through the issuance of a resignation letter addressed to the Chairman of the board of directors, or in case of the resignation of the Chairman, to the company’s audit board or audit committee.

The resignation or the resolution on director’s dismissal must be filed at the commercial registry.

Last modified 1 Mar 2021

If the company has a constitution, the constitution will ordinarily provide that the shareholders may by resolution remove a director from office and may by resolution appoint a replacement.  The parent company of a wholly-owned subsidiary will invariably have this power.

The constitution may confer additional powers of removal – for example, to enable the board to remove a director.  If the company has a constitution, the constitution will ordinarily provide that a director may also resign at any time by giving written notice to the company.

ASIC must be notified when a director leaves office.  Companies must do this within 28 days of the departure taking place, or the company will be subject to late fees.  The retiring or resigning director is also permitted to notify ASIC that they have ceased to act as a director of the company.

Last modified 8 Feb 2021

Shareholders have a residual statutory power to remove directors by a majority resolution (subject to certain procedural requirements). If a director is appointed in the articles of association, their removal may be restricted to important reasons.

When a director leaves office, notice must be filed at the companies register without undue delay. The companies register must be provided with the respective resolution in notarised form or the original resignation letter. The notice is to be signed in notarised form by the remaining director(s) (depending on whether a director can represent the company alone or together with another director).

Last modified 8 Feb 2021

Directors can in principle be dismissed ad nutum (at any time with immediate effect and without any reason) by the shareholder(s), unless the articles of association or the appointment decision states otherwise. However, the general shareholders’ meeting may always, at the moment of dismissal, provide for a notice period or a severance payment - unless the articles of association state otherwise. In the case of dismissal for legal cause however, a director will not be entitled to such compensation. In addition, a director may in principle also voluntarily resign at any time by informing the management organ.

For directors appointed in the articles of association (which is possible in a private limited liability company – but is rather uncommon), resignation or dismissal will require an amendment of the articles of association for the removal of said directors.

When a director resigns or is dismissed, the resignation or removal decision needs to be filed and published in the Annexes to the Belgian State Gazette to be effective vis-à-vis third parties.

Last modified 8 Feb 2021

Subject to the constitution of a company, a director of a private company may be removed from office by special resolution passed at a meeting called for the purpose or for purposes that include the removal of the director. The notice of the meeting shall state that the purpose of the meeting is the removal of the director.

A company can also alter its constitution so as to empower itself to remove a director appointed under the constitution provided the alteration is bona fide and for the benefit of the company as a whole.

In the event that a director has a separate independent contract with the company and he is removed either by provisions in the Companies Act or by alteration of the constitution, but his/her removal is found to be in breach of the contract, then he/she can sue for damages for wrongful dismissal.

A director appointed under the constitution can only be removed by alteration of the constitution, under which circumstances he cannot sue for breach of contract.

A director may also resign at any time.

When a director leaves office, notice must be filed at the Companies and Intellectual Property Authority within 14 days.

Last modified 1 Mar 2021

Directors are freely removed by shareholders acting in shareholders' meetings. In order to revoke the board, all members must be removed at the same time.

Removal affects all directors, therefore individual or collective revocation of one or more board members is not permitted.

Last modified 5 Apr 2021

The termination of the office of the director occurs on the day of the decision of the General Meeting to dismiss that person from office, unless a later date is specified in the decision. If a director does not want to continue in the performance of his office for any reason, they may resign from their position by making a notification to the General Meeting. However, they may not resign in a situation unsuitable for the company and their position shall only end one month after the delivery of such notice, unless the articles of association or the management agreement stipulates otherwise or the General Meeting approves an earlier termination date.

Last modified 8 Feb 2021

Directors are removed by the shareholder(s) at the general meeting by a simple majority of votes if the directors have been elected at the general meeting. However, directors that have been appointed by e.g. a third party in accordance with the articles of association may at any time be removed by that person having appointed such director.

Directors are entitled to resign at any time during their term.

The decision to remove directors must be filed with the Danish Business Authority together with the general meeting minutes in question no later than two weeks after the meeting.

Last modified 8 Feb 2021

A director is removed by the same party which appointed them. The power to remove directors cannot be removed by the company's articles of association.  A director may also resign at any time.

When a director leaves office, notice must be filed at the Trade Register without delay.

Last modified 8 Feb 2021

In an SAS, the rules for the removal of the directors (whether President, General Manager, Delegated General Manager or any other manager) are freely set out in the bylaws (with or without cause; with or without prior notice; with or without any removal indemnity, etc.).

However, whatever the contents of the bylaws, a removal which is abusive (i.e. decided under circumstances having affected the reputation or the honor of the relevant manager) may result in damages being granted by courts to the relevant manager. Usually, the bylaws provide that the shareholders are vested with the power to remove managers (at least the President).

Any decision to remove the President or any other legal representative of an SAS (or any other manager of the SAS being included in the commercial extract of the SAS) must be filed with the competent Trade and Companies Registry within one month of the relevant decision.

Last modified 8 Feb 2021

Managing directors are removed either:

  • by a shareholder resolution or
  • by a resignation letter of the particular managing director which must be addressed to the shareholders’ meeting/supervisory board (see above) and received by the latter.

The removal must also be filed with the commercial register and is merely declaratory.

Last modified 8 Feb 2021

Shareholders have a residual statutory power to remove directors by ordinary resolution (i.e. a simple majority) which cannot be removed by the company's  articles of association. It is common for the articles of association to confer additional powers of removal – for example, to enable the board to remove a director. A director may also resign at any time unless the articles of association provide otherwise.

The company must deliver to the Companies Registrar a notice in the specified form (Form ND2A) within 15 days after the removal becomes effective.

Last modified 8 Feb 2021

  • The general meeting may remove a director at any time, without having to give any reason. In a wholly-owned company, the sole shareholder resolves on the removal (this must be in writing).
  • If the company has issued a preference business quota (kft) / share (zrt) that entitles its holder to appoint/remove director(s), the removal will be decided upon by the holder(s) of such preference business quota (kft) / share (zrt), there is no need for any action by the general meeting. For the decision to take effect, the holder must notify the company of its decision (removal).
  • A director may also resign at any time (without having to give reasons) by notice to the company delivered to the other director(s) of the company or its decision-making body. By force of law, if continuity of the operation of the company requires, the resignation will take effect only upon the appointment of the new director/ successor but in any case, 60 days after the resignation (so e.g. a director may not “jump ship” immediately if he is the only director in a company and his successor has not been elected).
  • Removal of/resignation by a director must be registered in the Hungarian companies register. The effective date of the removal/resignation will be the date determined as such in the relevant resolution/resignation – the Hungarian companies register will record such date as the effective date of the change.

Last modified 8 Feb 2021

Shareholders have a residual statutory power to remove directors by a majority resolution (subject to certain procedural requirements) which cannot be removed by the company's constitution.  It is common for the constitution to confer additional powers of removal – for example, to enable the board to remove a director, or, in a subsidiary context, for the parent company to be able to remove a director by simple written notice to the company.  A director may also resign at any time.

When a director leaves office, notice must be filed with the Registrar of Companies register within 14 days.

Last modified 8 Feb 2021

Shareholders have a residual statutory power to remove directors by a majority resolution (subject to certain procedural requirements). The Italian Civil Code provides that the directors of an Italian S.p.A. may be removed at any time by means of a resolution of the ordinary shareholders meeting. Directors removed without cause may have a claim for damages deriving from their removal from the board. In the absence of reputational damage related to the manner of removal, damages generally correspond to the compensation that director would have received, had he stayed in office for the residual period of his appointment.

In a two-tier system the supervisory board is entitled to remove directors.

Alternatively, in limited liability companies, it is also possible to enable the removal of directors by statute only when a good cause occurs. In such companies, specific removal rights can also be set out in the by-laws.

If limited liability companies’ by-laws provide specific appointment rights, the director can be removed at any time by the shareholder who has the appointment right. A resolution of the shareholders’ meeting can remove the director only if there is a good cause underpinning the revocation, which is expressed and explained in the context of the shareholders’ meeting.

A director may resign at any time.

When a director leaves office, notice must be filed at the companies register within 30 days.

Last modified 8 Feb 2021

Shareholders can be removed at any time by a resolution of the shareholders' meeting (which is the same type of resolution to appoint a director as described above).

A director may claim damages from the company for the removal unless the dismissal is based on a justifiable reason.  The damages will usually include remuneration for the remaining term of the director who was removed.

Dismissal of a director shall be registered at the company’s corporate registry within two weeks of the dismissal. 

Last modified 8 Feb 2021

A director may resign at any time in writing.

In practice, a statutory declaration is attached to the letter of resignation. Sometimes, the physical presence of the resigning director may be required before the resignation is acknowledged and noted by the Registrar. These are administrative requirements put in place to curb cases of fraudulent removal of directors which prior to 2015 was not unheard of.

Shareholders reserve the power to remove directors by a majority resolution (subject to certain procedural requirements stipulated in the Companies Act). The articles and, where a company has a shareholders’ agreement governing it, such agreement, may also set out additional powers/processes of removing directors. The director who is the subject of removal is entitled to due process including the right to be heard.

Section 138 of the Companies Act requires notice of any changes to directors or in their particulars to be filed at the Business Registration Service (BRS) within 14 days of the change. The courts have made it clear that while the failure of a company to comply with the provisions of section 138 exposes the company and each of its officers to penal sanction, nothing in the statute suggests that the changes not notified are invalid for the reason of non-notification.

Last modified 16 Jun 2021

The managers may be removed at any time, with or, if so provided for by the articles of association, without cause (ad nutum), by a resolution of the shareholders.

Damages against shareholders might be sought in case of a harsh or vexatious removal.

Last modified 8 Feb 2021

Any member of the board of directors may be dismissed (either with just cause, or without just cause), at any time, by means of a resolution approved by the company's general assembly. A director may also resign at any time through the issuance of a resignation letter.

Any dismissal by the company or resignation by the director without just cause may be subject to compensation.

This information must be presented to the Legal Entities Registry for record and updated on the company’s commercial registration certificate.

Last modified 19 Aug 2021

A director can be dismissed by the corporate body competent to appoint. Generally this is the general meeting or, if the Large Company Regime applies, this can be the supervisory board. For a BV, the articles of association may provide that a director may also be dismissed by another corporate body, unless the Large Company Regime applies.

When a NV has established a works council (ondernemingsraad) by virtue of statutory provisions, the proposal for the appointment, suspension, dismissal or discharge of a director must not be presented to the general meeting before the works council has been given the opportunity to determine its point of view on it. 

Last modified 8 Feb 2021

Notwithstanding anything in a company’s articles or any agreement between a director and the company, a director can be removed by a simple majority vote of the shareholders, subject to certain procedural requirements which must be strictly followed. A director may also resign at any time.

When a director leaves office, notice must be filed at the Corporate Affairs Commission within 14 days.

Last modified 1 Mar 2021

The members of the board of directors serve for two years. Board members can be removed by the body who elected the director. This does not apply for a board member that has been elected by the employees. The removal decision must be registered with the Norwegian Register of Business Enterprises by filing a registration form.

Any member of the board of directors can retire before their period of service has expired. A director who wishes to resign must notify the company's board of directors and file a notification form with the Norwegian Register of Business Enterprises.

Last modified 16 Jun 2021

Directors may be removed at any time, either by the general meeting or by a special meeting that elected them, even if their appointment was one of the conditions of the articles of incorporation of the Company.

Also, the position of director becomes vacant by death, resignation, removal, or if the director has incurred one of the grounds for impediment specified by law or the company's bylaws.

If the director’s appointment was registered before the Public Registry of Companies, it will be necessary to file a notarised copy of the shareholders' meeting minute to register the removal of the director.

Last modified 26 Jul 2021

Shareholders have a statutory power to remove management board members at any time (via a shareholders' meeting or by written resolution). Management board members may also resign at any time by simple written notice to the company.

When a management board member leaves office, notice must be filed with the commercial register within seven days. By the same deadline, notice of removal/resignation should be filed with the electronic Central Register of Beneficial Owners.

Last modified 8 Feb 2021

Any member of the board of directors may be dismissed (either with cause, or without cause) at any time by means of a resolution approved by the company's shareholders (via a shareholders' general meeting or by unanimous written resolution). A director may also resign at any time through the issuance of a resignation letter addressed to the Chairman of the Board of Directors, or in case of the resignation of the Chairman, to the company’s audit board or audit committee.

The resignation or the resolution on director’s dismissal must be filed at the commercial registry office within 60 days from the date of the shareholders resolution or the issuance of the resignation letter.

Last modified 8 Feb 2021

In the case of LLCs: Directors are removed by decision of the GMS.

In the case of JSCs:

  • With a one-tier system – the sole director/members of the board of directors is/are removed by decision of the GMS. The managers are removed by decision of the board of directors.
  • With two-tier system – the sole manager/members of the executive board is/are removed by decision of the supervisory board (or by the GMS in case the AoA expressly provides this possibility). The members of the supervisory board are removed by decision of the GMS.

For removals to be binding on third parties, they  must be registered with the Trade Registry.

Last modified 8 Feb 2021

The Director is removed by a decision of the general participants meeting of the company, unless this matter is attributed to the BoD's competence under the charter. The removal of the Director is subject to registration in the Unified State Register of Legal Entities.

The procedure of removing BoD members is regulated by the company's charter.

Last modified 8 Feb 2021

  • Removal by shareholders. Section 152 of the Act provides that shareholders may remove directors by ordinary resolution, notwithstanding any agreement between the company and the directors.
  • Written notice by appointing shareholder. It is also common for the constitution of a company to enable the appointing shareholder (or the parent company) to remove its nominee director by written notice.
  • Vacation of office. A director may be disqualified and vacated from office upon conviction of certain offences (please also refer to Who can be a director? for examples of relevant statutory breaches) and persistent default in relation to delivery of documents to the Registrar.
  • Resignation: A director may resign by writing under his hand left at the registered office of the company at any time.

When a director leaves office, a notice must be filed with the ACRA within 14 days.

Last modified 8 Feb 2021

Shareholders may remove a director by a majority resolution adopted at a shareholders meeting (subject to certain procedural requirements, including the requirement to provide the director in question with an opportunity to make representations to the shareholders). 

If a company has more than two directors, the board may remove a director by resolution (after allowing representations by the director) if it determines that the director:

  • has become ineligible or disqualified
  • has become incapacitated or
  • has neglected, or been derelict in, the performance of the functions of a director. 

If a company has fewer than three directors it may apply to the Companies Tribunal to remove a director on the same basis.

A director appointed for a fixed term ceases to be a director upon expiry of that term.

A director may also resign at any time.

When a director leaves office, notice must be filed at the Companies and Intellectual Property Commission within ten days.

Last modified 19 Apr 2021

Directors may be removed by resignation or, at any time, by the company’s shareholders even if the removal is not included on the general meeting’s agenda.

The removal of a director must be registered with the Commercial Registry in order to be effective against third parties.

Last modified 8 Feb 2021

Members of a company's board of directors must be removed by a shareholders' meeting. The removal decision shall be duly registered with the Swedish Companies Registration Office. For the registration, a verified copy of the minutes of the shareholders' meeting and a notification form must be filed with the Swedish Companies Registration Office. The removal decision becomes effective from and including the date on which notification of the removal has been received by the Swedish Companies Registration office or the later date stated in the decision on which the notification is based.

An employee representative may at any time be dismissed from the board on the same grounds as any ordinary board member. However, it is up to the local trade union, which appointed the employee representative, to decide upon any such dismissal (rather than the shareholders in a general meeting who can decided to remove ordinary board members).

A managing director must be removed by the company's board of directors. The removal decision shall be duly registered with the Swedish Companies Registration Office. For the registration, a notification form must be filed with the Swedish Companies Registration Office. The removal decision becomes effective from and including the date on which notification of the removal has been received by the Swedish Companies Registration Office or the later date stated in the decision on which the notification is based.

A director may also resign at any time. A director who wishes to resign from office must notify the company's board of directors and file a notification form at the Swedish Companies Registration Office. The same applies to the managing director.

Last modified 8 Feb 2021

Directors may be removed upon their resignation or by the shareholders in accordance with constitutional documents of the company or the law.

If the constitutional documents are silent as to the modality for removing a director, the process set out in the law must be provided. According to the CA, the process for removing a director by the shareholders is by a majority resolution preceded by a special notice to the members at least 28 days before the date of the meeting in which the members would vote on the resolution removing the director. The special notice setting out the resolution intending to remove the director must also be served on the director in question. The director to be removed must offered a right to be heard through reasonable length written representations (without prejudice to his right to be heard orally).

It is common for the articles of associations to confer additional powers of removal – for example, to enable the board to remove a director, or, in a subsidiary context, for the parent company to be able to remove a director by simple written notice to the company.  A director may also resign at any time.

When a director leaves office, notice must be filed at the companies register within 14 days.

Last modified 1 Mar 2021

Onshore UAE

Directors may be removed by way of a written resolution of the shareholders. Where the name of a director is listed on the memorandum of association, an amendment removing the name of the director is necessary, which must be notarised at a UAE notary public. The same conditions apply as with appointing directors with regard to signatories evidencing their authority to sign on these documents.

Dubai International Financial Centre

Similar to the process for removing a director, an online request must be filed with the DIFC Registrar of Companies through the portal account of the company. The documents that must be filed for this process include either a resignation/termination letter or a written shareholder's resolution approving the removal.

Last modified 8 Feb 2021

Shareholders have a residual statutory power to remove directors by a majority resolution (subject to certain procedural requirements) which cannot be removed by the company's constitution.  It is common for the constitution to confer additional powers of removal – for example, to enable the board to remove a director, or, in a subsidiary context, for the parent company to be able to remove a director by simple written notice to the company.  A director may also resign at any time.

When a director leaves office, notice must be filed at the companies register within 14 days.

Last modified 8 Feb 2021

In most states, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares of stock then entitled to vote at an election of directors pursuant to the company’s charter, subject to certain limitations for companies with classified boards or cumulative voting.  In private companies attracting investment from venture capital or other sophisticated investors, it is common for those investors to have voting or similar agreements that allow them to control the removal and appointment of designate directors.

Last modified 8 Feb 2021

The directors are removed by the general meeting of the shareholders. The powers of the sole director or the chairman of the board of directors can be terminated, or he/she can be suspended from his/her duties only when the new director/chairman or interim director/chairman is appointed. The change of director must be registered in the companies register.

Last modified 8 Feb 2021

Directors are removed in accordance with the COBE, if they have been:

  • Declared insolvent or bankrupt in terms of any law in Zimbabwe or any other country.
  • Convicted of theft, fraud, forgery or perjury.
  • Sentenced to serve a term of imprisonment without the option of a fine or to a fine exceeding level 5 unless they have received leave from a court or been discharged or rehabilitated.

Further, a director may be removed, with or without a stated reason or cause, upon a majority shareholder vote.  However, the removal of the director may only be carried out if the notice of the meeting states that the purpose of the meeting is to vote on the removal of such director at the meeting.

A director may also choose to resign. Written notice must be given to board.

Last modified 19 Apr 2021

Angola

Angola

What type of company is typically used in group structures?

In Angola, the most common type of company used in group structures is the private company limited by shares.  This guide therefore focuses on the management of private limited companies.

Last modified 1 Mar 2021

Angola

Angola

What is a "director"?

There is no complete definition of the term "director" in Angolan law.  Basically, the law regards someone who manages the affairs of a company on behalf of its shareholders as a director.

What are the different types of director?

Directors validly appointed as such, through a shareholders' resolution, may be executive or non-executive.

The executive directors are responsible for the management of the affairs of the company.

The non-executive directors are responsible for the general supervision of the performance of executive directors’ duties.

Last modified 1 Mar 2021

Angola

Angola

Who can be a director?

A director must be at least 18 years old.  In the event of a legal person being appointed as a director, it must appoint an individual to exercise the office in their own name. The legal person must share liability with the person appointed by it.

Foreign directors must hold a work visa, ordinary visa or residency card.

Minimum / maximum number of directors

Under Angolan law there is no maximum number of directors. The company’s articles of association may, however, specify a greater minimum number and/or specify a maximum.

The management of private limited companies is carried out by a board of directors, composed of an odd number of members.

It may be agreed in the articles of association that the management shall be exercised by one single director when:

  • The number of shareholders is only two (which can only happen in cases where the State, public companies or entities legally equivalent to the State hold the majority of the share capital).
  • The share capital does not exceed an amount equivalent, in national currency, to USD50,000.00.

Last modified 1 Mar 2021

Angola

Angola

How are directors appointed?

Directors must be appointed by the company's shareholders (via a shareholders' general meeting or by unanimous written resolution).

A resolution appointing a director must be filed at the company’s registry office.

Directors must be appointed for the period fixed in company’s bylaws, which must not exceed four calendar years with re-appointment being permitted.

How are directors removed?

Any member of the board of directors may be dismissed (either with cause, or without cause) at any time by means of a resolution approved by the company's shareholders (via a shareholders' general meeting or by unanimous written resolution).

A director may also resign at any time through the issuance of a resignation letter addressed to the Chairman of the board of directors, or in case of the resignation of the Chairman, to the company’s audit board or audit committee.

The resignation or the resolution on director’s dismissal must be filed at the commercial registry.

Last modified 1 Mar 2021

Angola

Angola

Typical management structure

Typically, the management of private limited companies is carried out by a board of directors and supervision by a supervisory board, made up of an odd number of members, elected by shareholders at a general meeting.

One of the directors is appointed as Chairman of the board of directors.

How are decisions made by directors?

The manner in which directors can make decisions is set out in the company's bylaws.  In private companies limited by shares, the bylaws typically provide directors with flexibility to determine between themselves how decisions are made – whether by physical meeting, telematic means (provided that the company ensures the authenticity of declarations and the security of communications, registering the content of all interventions) or an unanimous written resolution.

Directors must meet at least once a month, unless otherwise provided in company’s bylaws.

The validity of the resolutions of the board of directors depends on the presence of the majority of its members.

In relation to the minimum quorum, the board of directors must not approve resolutions without the absolute majority of votes of the directors present.

Authority and powers

The board of directors has exclusive and full powers to represent the company.

The powers of representation of the board of directors are performed jointly by the directors.

Acts performed by the directors, on behalf of the company and in the use of the powers conferred upon them by law, shall bind the company before third parties, irrespective of any limitations that may be established by the articles of association or by decisions of shareholders, whether published or not.

Directors shall bind the company if, by affixing their signature, they indicate that intention.

Delegation

Subject to Angolan law restrictions, and unless otherwise provided in the bylaws, the board of directors may delegate powers to one or more directors to deal with certain managing matters. However, the board retains overall responsibility for the company's operations and management.

The board of directors can also appoint attorneys to perform certain acts or categories of acts, without the need for an express contractual clause.

Last modified 1 Mar 2021

Angola

Angola

What are the key general duties of directors?

The key duties of a director are set out in the Angola Companies Law, pursuant to which the director:

  • Must observe a duty of care towards the company, demonstrate capability, technical competence and an understanding of the company's business considered appropriate for the role, and execute its tasks with the diligence of a careful and earnest manager.
  • Must observe a duty of loyalty towards the interests of the company, serving the long term collective interests of the shareholders and taking into consideration the interests of other stakeholders such as employees, clients and creditors by ensuring the sustainability of the company. As a specific realization of this duty, the directors must not pursue or develop, directly or indirectly, other activities in direct competition with the company, unless duly authorized by the general meeting of shareholders.
  • Must carry out any acts deemed necessary or appropriate to achieve the corporate purpose in line with the resolutions adopted by the shareholders, the bylaws and the applicable law.
  • Are responsible for drafting merger and spin-off plans, in addition to other documents required or appropriate for the full legal and economic transparency of the transaction, as well as preparing a report in case of change of the company's legal form (i.e. a change to a different type of company).
  • Are responsible for performing and executing all managing acts not specifically reserved by law or bylaws to the general meeting of shareholders.
  • Are responsible for, following a shareholders resolution (except an unlawful resolution or resolutions that are not compliant with the company's by-laws), taking all necessary measures to execute such resolution, as promptly as possible (namely resolutions making any amendments to the company’s bylaws).

In addition, if agreed by the shareholders and set out in the company’s bylaws, the directors must also decide on and implement:

  • The acquisition, disposal and encumbrance of real estate of the company.
  • The disposal, encumbrance and lease of the business establishment of the company.
  • The subscription or acquisition of other companies' shares or the disposal and/or encumbrance of these shares.
  • The establishment of subsidiaries, agencies, branches or other local forms of representation of the company.

In general, the directors are bound to manage a company in a professional and diligent way, which includes compliance with all legal, statutory and contractual requirements.

What are directors' other key obligations?

The directors are responsible for preparing the annual reports and accounts and other financial statements required by law in respect of each financial year, and must submit them to the general meeting of shareholders and supervisory board, within three months from the end of each financial year, or within five months for companies that submit consolidated accounts or that use the equity method.

The directors are also responsible of preparing and submitting a proposal for the allocation of profits and/or handling of losses to the shareholders, in respect of each financial year.

Transactions with the company

Whenever there is a conflict of interest between the company and a director, the director shall advise the Chairman of the board of directors and abstain from voting on the resolution concerning that conflict.

The company may only grant loans or credit to directors, make payments on their account, guarantee obligations that they have contracted or make advances to them on account of the respective remuneration, up to the limit of the monthly amount thereof.

Contracts signed between the company and its directors, directly or through another person, shall be null and void except if they have been previously authorised by means of a decision of the board of directors, in which the director concerned may not participate, and if they have obtained the favourable opinion of the supervisory board.

Last modified 1 Mar 2021

Angola

Angola

Breach of general duties

Directors are severally liable towards the company for the damages caused to the company as a result of their actions or omissions that are not compliant with their legal statutory or contractual obligations, unless they prove that their actions/omissions were not caused with intentional or negligent misconduct.

The directors may also be subject to criminal liability.

A lawsuit against the directors may be brought by:

  • The company – in this case a shareholder’s resolution to bring the lawsuit must be approved by the majority of the shareholders, and the lawsuit must be sought within six months from the date of such resolution.
  • In the absence of a lawsuit sought by the company, one or more shareholders who jointly own, at least, 10% of the share capital  may bring a liability suit against the directors to claim reparation for damages caused to the company.

A company may seek a range of remedies against a director for breach of duty including damages, recovery of misapplied property, accounting for profit made in breach of duty, an injunction to prevent breach and rescission of a contract.

Liabilities on insolvency

If during the course of its management the company goes bankrupt, the directors may incur in liability if the bankruptcy is declared fraudulent or culpable. The crime of fraudulent or culpable bankruptcy is punishable with a penalty of two to eight years' imprisonment.

Other key risks

Personal liability for directors may, in certain circumstances, arise under Angolan legislation including that relating to environmental and health and safety, employment, consumer protection and bribery/anti-corruption.  In certain cases, criminal liability may arise.

A director may also be disqualified by the court from acting as a director or from taking part in the promotion, formation or management of a company.  A disqualification order can be made for a variety of reasons (e.g. conviction for criminal offences relating to the running of a company, persistent breaches of statutory obligations such as filing documents with the companies register, being found liable for fraudulent or wrongful trading and generally for conduct which makes a director unfit to manage a company).

Last modified 1 Mar 2021

Angola

Angola

How can directors be protected from liability?

The board of directors or the shareholders' general meeting may declare null and void or annul defective resolutions, at the request of any director, shareholder with the right to vote or of the supervisory board, made within one year of becoming aware of the defect that serves as its basis.

The general meeting of shareholders may ratify any resolution or substitute an invalid resolution if it does not concern a matter that falls within the exclusive competence of the board of directors.

Directors shall not execute or allow to be executed resolutions of the board of directors that are null and void.

Directors' and officers' (D&O) insurance is also available. It typically provides both cover for individual directors against claims made against them in their capacity as director, including defence costs (which applies when indemnification by the company is not available), and company reimbursement when it has indemnified its directors (subject to an excess/retention). Policy exclusions typically include claims in respect of a director's fraud, dishonesty, wilful default or criminal behaviour.

What practical steps can directors take to avoid liability?

Directors should:

  • Keep informed about the affairs of the company, particularly its financial position, and compliance obligations. Directors should have access to up to date financial information, prepare thoroughly for and regularly attend board meetings and familiarise themselves with key legislation affecting the business.
  • Make full disclosures to the board and shareholders if they have outside positions or interests which may give rise to a conflict of interest and/or if they have a personal interest in any proposed or existing transaction or arrangement with the company.
  • Keep records and take advice – directors should ensure that full written records of board proceedings are made reflecting the reasoning behind key decisions. This should include any alternative courses of action considered. Minutes should also record any disagreement amongst the board and the reasons for that. In addition, directors should ensure that returns and accounts and filed promptly and take professional advice for decisions based on areas outside their personal expertise, for example from legal professionals and accountants.
  • Be aware of, and comply with, any group-wide governance policies. These may cover areas such as health and safety, ethics, bribery/anti-corruption, and human rights. Compliance with them is designed to help directors (and employees) fulfil their duties and obligations and minimise the risk of liability.
  • Act, not only with diligence, but also with loyalty, keeping in mind that they must act always in the interest of the company, taking into account the long-term interests of the shareholders and considering the interests of other subjects relevant to the sustainability of the company, such as its workers, customers and creditors.
  • Also in a group situation, directors should keep in mind that thet must act in the best interest of their group company. Whilst group interests and that company's interests are usually aligned, this may not always be the case (e.g. when their group company's solvency is adversely impacted).  It is important to keep communication and reporting lines as open and clear as possible between parent and subsidiary companies when issues may arise and seek appropriate advice.

Last modified 1 Mar 2021