Board / management structure

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.

Last modified 1 Mar 2021

As far as third parties are concerned, directors are able to bind the company and enter into contracts on its behalf even if there are internal limits on their power to do so (eg in the company's constitution or in internal policies and protocols).  The Corporations Act 2001 (Cth) (the Act) sets out various statutory assumptions that people dealing with companies are entitled to make.

Normally, the company's constitution gives the directors wide powers to manage its business and affairs as they think fit (although if the company is a wholly-owned subsidiary, additional decision-making powers or consent requirements may be reserved to the sole member).  Directors' powers are collective, meaning that directors should act together as a group on the company's behalf (subject to any specific delegations to individual directors, or authority that can customarily be exercised by a managing director or equivalent).

Last modified 8 Feb 2021

As far as third parties are concerned, directors are able to bind the company and enter into contracts on its behalf even if there are internal limits on their power to do so (e.g. in the company's constitution or in internal policies and protocols).

The authority of directors vis-à-vis third parties cannot be limited, neither by resolution of the shareholders nor by the articles of association.

Last modified 8 Feb 2021

Under Belgian law, a distinction needs to be made between internal management powers and external representation powers.

Internal management powers

The management organ is competent to carry out all acts and take all decisions that are necessary or useful in order to realise the company’s corporate purpose, except for those powers which the law explicitly attributes to the general shareholders’ meeting (i.e. the “residual” powers reside with the management organ).

The articles of association may limit the powers of the management organ (by submitting certain decisions to a shareholders’ meeting), but such limitation is not effective vis-à-vis third parties (even if disclosed).

External representation powers

As far as representation vis-à-vis third parties is concerned, the following distinction needs to be made depending on limited liability company type:

  • In a private limited liability company, the company is, in principle, validly represented by each director (given the fact that they dispose of individual management power). However, the articles of association may deviate (for instance, by installing a collegiate management body and requiring double signatures).
  • In a public limited liability company, the company is, in the case of a board structure (be it a one-tier structure or a two-tier structure), validly represented through the majority of its board members. Evidently, in case of a sole director, he/she will solely represent the company.

In a two-tier structure, the representation powers of the supervisory board are limited to its specific competences, whereas the management board has full representation powers.

The articles of association commonly provide for specific signature clauses - for instance, a single signature clause (e.g. a (managing) director acting alone) or a joint signature clause (two directors acting jointly)). Such signature clauses are effective vis-à-vis third parties (if published), but do note that any qualitative or quantitative restrictions in such signature clauses are not effective vis-à-vis third parties, even if disclosed.

Last modified 8 Feb 2021

The main source of the director’s powers and authority is the company’s constitution and where the company does not adopt a constitution, the Companies Act, therefore, the two could also be deemed as a source of constraints on the director’s powers.

Last modified 1 Mar 2021

The board of directors of a company represents it judicially and extra-judicially and is vested with all the powers of administration and disposition that the law or statute does not otherwise specify as the responsibility of the shareholders’ meeting. It is not necessary to grant the board any special power, even for those acts or contracts for which laws require this.  This does not preclude the representation of the CEO.  Consequently, there is not a list of matters which are the responsibility of the board of directors, on the contrary, the law defines only those matters that must be agreed upon by the shareholders given their relevance.

In Chile, directors do not hold the power to represent the company individually.  However, the board of directors as a body may delegate part of its powers to the main executives, managers, assistant managers or lawyers of the company, to a director or to a committee of directors and, for specially determined objects, to other people.

Last modified 5 Apr 2021

Every director has a so-called general executive power of attorney and may represent the company and make decisions individually in all matters, even if the company has a multi-member collective board of directors, unless the articles of association specify a different way of acting on behalf of the company (e.g. that two executives must act together). Where a company has multiple directors which do not constitute a collective body, decisions on the management of the company’s business require the consent of the majority of them, unless stipulated otherwise in the memorandum of association. The rules for representing the company set out in the articles of association and stated in the Czech Commercial Register must be followed by all directors, as if a breach of such rules occurs, the director will be liable to the company, as directors are contractually bound by such rules.

Last modified 8 Feb 2021

A private limited liability company is bound by agreements made by the entire board of directors on behalf of the company even if there are internal limits on their power to do so (e.g. in the rules of procedure, internal instructions etc.).

However, a company will not be bound in cases where the board of directors have entered into contracts that either:

  • go beyond the limitations set forth in the Danish Companies Act or
  • are outside the scope of the company’s objectives or outside of the board members’ power to do so

provided that the third party in question knew or ought to have known that the board members acted outside the scope of the company’s objectives or their powers.  

Pursuant to the Danish Companies Act, a company is also bound by agreements made by a sole member of the board of directors or by an executive officer. This general rule may, however, be derogated from in the company’s articles of association which companies usually do. The articles of association may derogate from the Danish Companies Act by e.g. stipulating that the company is bound by the joint signature of a board member and an executive officer.

Last modified 8 Feb 2021

As far as third parties are concerned, directors are able to bind the company and enter into contracts on its behalf even if there are internal limits on their power to do so (eg in the company's articles of association or in internal policies and protocols), unless the third party knew or should have known about the limitation.

Normally, the board of directors has wide powers to manage its business and affairs as it thinks fit. The powers of the board are collective, meaning that directors should act together as a group on the company's behalf. The managing director has power to act alone in day-to-day management of the company in accordance with the guidance and directions from the board.

Last modified 8 Feb 2021

In an SAS, the President has the widest powers to act in all circumstances on behalf of the company, within the limit of the corporate purpose and subject to the powers/matters which are reserved to the shareholders by law and, as the case may be, the bylaws and subject to potential additional restrictions provided for in the bylaws.

The bylaws may also grant any General Manager or Delegated General Manager representation powers vis-à-vis third parties (in addition to additional management powers). Limitations of powers of legal representatives of an SAS are not enforceable against third parties.

Last modified 8 Feb 2021

Managing directors can represent and bind the company towards third parties in an unlimited way regardless of any internal restrictions (e.g. in the articles of association or rules of procedure such as consent provisos in favour of the shareholders’ meeting or a supervisory board), unless there is a case of abuse of such power of representation (Missbrauch der Vertretungsmacht), meaning that a third party is aware of or, under specific circumstances, should have been aware of such misuse.

Last modified 8 Feb 2021

As far as third parties are concerned, directors are able to bind the company and enter into contracts on its behalf even if there are internal limits on their power to do so (e.g. in the company's articles of association or in internal policies and protocols).

Normally, the company's articles of association gives the directors wide powers to manage its business and affairs as they think fit (although the articles of association may also provide that shareholders may give the board specific directions as to its conduct). Directors' powers are collective, meaning that directors should act together as a group on the company's behalf.

Last modified 8 Feb 2021

  • Powers (competence). Under Hungarian law, the powers of the Board/directors are residual, meaning that all decisions that are not expressly reserved for the general meeting shall fall within the competence of the Board/directors. Certain key decisions are reserved for the general meeting by law (e.g. approval of annual accounts, decrease of share capital, winding up of the company, appointment and dismissal of directors, auditors supervisory board members). Further, the shareholders may reserve additional decisions for the general meeting through the articles of association. Decisions that are not reserved for the general meeting by law and the articles of association shall fall within the competence of the Board/director(s). The foregoing issue concerns the allocation of decision making powers within the company and as such this is a corporate governance / internal issue.
  • Authority. The directors are the legal representatives of the company vis-à-vis third parties. The representation rights of the individual directors (including the signing rights) can be sole or joint. In the latter case, the relevant legal document will only bind the company (as a general rule) if two directors sign it.  The companies register must show whether or not a director’s signatory right is sole or joint. Apart from the joint/sole signatory right, no other internal limitation on the directors’ authority shall be effective vi-a-vis third parties. For example, if the articles of association subject the signing of a contract above a given value to the prior approval of the general meeting and the directors sign such a contract without the approval of the general meeting, the contract shall still be binding and effective on the company. Non-compliance with such internal limitations will trigger the directors’ liability towards the company for beach of their duties but will not impact the validity/effectiveness of the directors’ act vis-a-vis third parties.

Last modified 8 Feb 2021

As far as third parties are concerned, directors are able to bind the company and enter into contracts on its behalf even if there are internal limits on their power to do so (e.g. in the company's constitution or in internal policies and protocols).

Normally, the company's constitution gives the directors wide powers to manage its business and affairs as they think fit (although the constitution may also provide that shareholders may give the board specific directions as to its conduct).  Directors' powers are collective, meaning that directors should act together as a group on the company's behalf.

Last modified 8 Feb 2021

If there is a board of directors, the company’s by-laws must specify which directors have authority to act in the name and on behalf of the company and whether they are able to do so individually (firma disgiunta) or if they have to act jointly (firma congiunta). As already outlined, this specification is irrelevant to third parties, unless it is proven that the third parties have acted intentionally to the detriment of the company.

The difference between the power of representation of the company and managing powers has to be noted: representation has to do with the ability of the director to act with third parties on behalf of the company and with the authority to bind the company by entering into contracts on the company's behalf. Managing powers have to do with the internal decisional process: the power to decide about the company’s operations.

Under the law, managing powers belong exclusively to the board of directors and are exercised collegially. It is common however for the board to delegate its powers to individual directors who become executives. The by-laws usually specify that executive directors are also able to act in the name and on behalf of the company providing them with authority to act with third parties.

As far as third parties are concerned, directors are able to bind the company and enter into contracts on its behalf even if there are internal limits on their power to do so. This rule applies to ultra vires acts and both to joint stock companies (SpA) and limited liability companies (Srl) . The internal limits are irrelevant for third parties even if published on a public register, unless it is proven that third parties have acted intentionally to the detriment of the company. A director may, however, be liable for damages resulting from acts carried out in violation of internal limits or acts which are ultra vires.

Last modified 8 Feb 2021

If the company has a board of directors, each representative director appointed from among the directors has the authority to solely represent the company. Other directors cannot represent the company without receiving authority from the representative director(s) or the board of directors.  In a company with a board of directors, the representative director and directors with relevant board authorization have authority to execute the business affairs of the company.

In a company without a board of directors, each director has the authority to solely represent the company unless one or more representative directors are to be appointed from among the directors.  Also, each director has the authority to execute the business affairs of the company, unless otherwise provided for in the articles of incorporation. If the company without a board has two or more directors, the business affairs of the company is determined by a majority of the directors, unless otherwise stipulated by the articles of incorporation.

Any restrictions imposed on the authority of the representative director to represent the company may not be asserted against a bona fide third party. Also, in general, as far as third parties are concerned in a transaction, a representative director can bind the company despite  lack of a necessary resolution unless the third party has knowledge of the directors' lack of authority or does not have knowledge with his/her negligence.

Last modified 8 Feb 2021

As far as third parties are concerned, directors are able to bind the company and enter into contracts on its behalf even if there are internal limits on their power to do so (e.g. in the company's articles of association or in internal policies and protocols).

Normally, the company's articles give directors wide powers to manage its business and affairs as they think fit. Sometimes the articles give shareholders the power to give the board specific directions e.g. to hold a general meeting. Directors' powers are collective, meaning that they are exercised jointly by way of board resolutions.

Last modified 16 Jun 2021

As far as third parties are concerned, managers are able to bind the company and enter into contracts on its behalf. The articles of association generally provide that the company is bound towards third parties by the signature of its sole manager, or in case of plurality of managers, by the sole signature of any manager or the joint signatures of any two managers, but they can provide for a different signature regime, e.g. the joint signatures of two managers. All powers not expressly reserved by the law or the articles to the general meeting of shareholders must fall within the competence of the board. Any limitation to the powers conferred on the board is not valid against third parties even if it is published.

Last modified 8 Feb 2021

The acts performed by directors on behalf of the company within the powers provided by the law, bind the company before third parties, notwithstanding the limitations on representation powers contained in the company’s articles of association or resulting from shareholders'/quotaholders' resolutions.

The directors bind the company, through their signature together with the indication of their capacity as a director.

Last modified 19 Aug 2021

In general, the board is authorised to make binding decisions and thus represent the company. The scope of these powers are determined by Dutch law and the articles of association. A legal act by the company is voidable if it exceeds the scope of the company's corporate objective (doeloverschrijding). Therefore directors are limited in their authority and capacity to act because their actions should be in line with the legitimate purpose of the company. 

Furthermore, the board may be restricted in its decision-making by the articles of association to the extent these provide that certain resolutions are subject to the prior approval of another corporate body of the company, such as the general meeting or, when installed by the company, the supervisory board or another corporate body of holders of a certain class of shares.

Pursuant to Dutch law directors cannot take part in the deliberation and decision-making process of the board if they have a personal direct or indirect conflict of interest (tegenstrijdig belang). A director has a conflict of interest when their personal interest (persoonlijk belang) is not aligned with the corporate interest (vennootschappelijk belang) of the company and as a result of which it can be reasonably questioned whether such director solely has acted in the interest of the company. If a director does not comply with the provisions on conflicts of interest, the resolution concerned is subject to voidability or nullification (in case of a decisive vote) and this member may be held personally liable towards the company. The voidability or nullification does not have an external effect towards third parties.

Last modified 8 Feb 2021

The business of a company is directed and managed by the board of directors who can exercise all powers of the company that are not required (by law or by the company’s articles) to be exercised by the members. Any collective act of the board of directors, or the act of a managing director in the usual way the business of the company, will generally be treated as the act of the company itself.

Where a company holds a person not duly appointed out to third parties as a director, and he acts as such on behalf of the company, the company is bound by his acts.

Last modified 1 Mar 2021

The board of directors jointly represents the company towards external parties and has the authority to sign on behalf of  the company.

The board of directors may authorise directors, the general manager or named employees to sign on behalf of the company. Such authorisation may be included in the articles of association, which may also restrict the board of directors’ powers to grant authorisation to sign for the company. The right to sign on behalf of the company may not be limited in another manner than individuals acting jointly. The signatory right must be registered with the Norwegian Register of Business Enterprises. The general manager represents the company in relation to the day-to-day management of the company.

As far as third parties are concerned, the board of directors and a managing director are able to bind the company and enter into contracts on its behalf even if there are internal limits on their power to do so (e.g. in respect of internal policies and protocols). However, a legal act may be considered void as against the company if the company, under certain circumstances, shows that the third party realised or ought to have realised that the authority had been exceeded.

Last modified 16 Jun 2021

The board, as a collective body, has the powers of management and legal representation necessary for the administration of the company according to its purpose, with the exception of those matters that the law or the bylaws attribute to the shareholders' meeting. It is important to mention that each director does not have individual powers of attorney to represent the company, unless these are granted by a specific resolution of the board of directors or the shareholders' meeting.

Last modified 26 Jul 2021

As far as third parties are concerned, management board members are able to bind the company and enter into contracts on its behalf even if there are internal limits on their powers to do so (e.g. in the company's articles of association, or in by-laws or internal policies and protocols). However, all legal acts on behalf of the company must be undertaken in accordance with the company’s rules of representation set out in the Polish Company Law and, optionally, in the company's articles of association. As a statutory rule, two management board members acting jointly or one member of the management board acting together with a commercial proxy (i.e. holder of a special power of attorney granted by company) are authorised to make statements on behalf of the company. Commonly, the company's articles of association give each management board member authorization to act solely. However, several important legal acts envisaged in the Polish Commercial Companies Code may be undertaken only upon the prior consent of the shareholders' meeting (for example, this applies to  a disposal or lease of the business enterprise or an organised part of it, establishment of a property right in relation to it or the acquisition and disposal of real property, perpetual usufruct right or of an interest in them or the reimbursement of additional shareholders’ payments made earlier to the company).

Normally, the company's articles of association give the management board members wide powers to manage its business and affairs - as they think fit (although the articles of association may also provide that shareholders may give the board specific directions as to conducting its affairs or prior shareholders’ consent may be required for specific matters, depending on, for instance, a threshold for a given action to be taken).

Last modified 8 Feb 2021

The powers of representation of the board of directors are performed jointly by the directors.  The company is  bound, before third parties, by those legal transactions concluded by the majority of the directors (or ratified by them), or by a smaller number of directors if so provided in company’s bylaws. The board of directors is responsible for managing the company’s business, and must act according to the resolutions of the shareholders only in cases where the law or the bylaws so determine. The board of directors has exclusive and full powers to represent the company.

Last modified 8 Feb 2021

As a general note, the directors may perform all the operations required to carry out the company’s scope of activity (except for the restrictions set forth by law or in the AoA) and may represent the company towards third parties provided that such right was granted to them by law or, as the case may be, by the GMS/AoA.

The company is bound by the acts of its statutory bodies (e.g. directors/board of directors), even if such acts exceed the company’s scope of activity, unless it proves that the third party knew or, given the circumstances, had to know the acts exceeded the scope of activity, or when such acts exceed the limits of the powers provided by law for the respective bodies. Publication of the AoA does not constitute, alone, the proof of knowledge. The provisions in the AoA limiting the powers granted by law to the statutory bodies are not enforceable against third parties, even if published.

Last modified 8 Feb 2021

The Director shall act on behalf of the company without a power of attorney, represent its interests and enter into transactions, issue powers of attorney, issue orders on the appointment or dismissal of the company's employees and impose disciplinary penalties. The Director shall have other powers which are not attributed by federal law or the company's charter to the competence of the general participants meeting or the company's other corporate bodies.

The scope of authority of a company's BoD shall be determined by the company's charter in compliance with federal law and include powers which are not attributed by federal law or the company's charter to the competence of the general participants meeting or the Director (eg arranging audit inspections, approving large scale and interested-party transactions, etc).

The Director and BoD members have the right to challenge a transaction of the company in cases provided by Russian law.

Last modified 8 Feb 2021

As far as third parties are concerned, section 25B of the Act provides that directors are able to bind the company and enter into contracts on its behalf even if there are internal limits on their power to do so (including in the company's constitution or in internal policies and protocols).

Normally, the company's constitution provides the directors wide powers to manage its business and affairs as they think fit (although the constitution may also provide that shareholders may give the board specific directions as to its conduct by way of, inter alia¸ shareholders’ reserved matters).  Directors' powers are collective, meaning that directors should act together as a group on the company's behalf.

Last modified 8 Feb 2021

As far as third parties are concerned, directors are able to bind the company and enter into contracts on its behalf even if there are internal limits on their power to do so (e.g. in the company's memorandum of incorporation or in internal policies and protocols), unless the third party as aware of such limits.

Usually the company's memorandum of incorporation gives the directors wide powers to manage its business and affairs as they think fit (although the memorandum of incorporation may also provide that shareholders may give the board specific directions as to its conduct in specific instances, or may limit the powers of the company (and thus limit the powers of the board)).  Directors' powers are collective, meaning that directors should act together as a group on the company's behalf – however each director has inherent authority to act individually on the board's behalf.

Last modified 19 Apr 2021

Directors manage and represent the company, they are responsible for making business decisions and overseeing the affairs of a company.

The representation of the company, in court or outside it, corresponds to the directors in the form determined by the company’s bylaws. In the case of a sole director, the power of representation shall necessarily correspond to him/her. In the case of joint and several directors, the power of representation shall correspond to each joint and several director. In the limited liability company, if there are more than two joint directors, the power of representation shall be exercised jointly by at least two of them in the manner determined in the company’s bylaws.

In the case of a board of directors, the power of representation corresponds to the board itself, which shall act jointly. However, the company’s bylaws may attribute the power of representation to one or more members of the board, either individually or jointly. In the latter case, the permitted scope of their actions shall be indicated.

Representation extends to all acts included in the corporate purpose defined in the company’s bylaws. Any limitation of the representative powers of the directors, even if registered with the Commercial Registry, shall be ineffective against third parties. Note that the company shall be bound to third parties acting in good faith and with no gross negligence, even when it appears from the company’s bylaws filed with the Commercial Registry that the act is not included in the corporate purpose.

Last modified 8 Feb 2021

The board of directors represents a company and signs its name. Further, the board of directors may resolve that the right to represent the company and sign its name may be exercised by two or more persons acting jointly or be exercised by some or each director individually. The managing director may represent the company and sign its name as required for the day-to-day management of the company.

As far as third parties are concerned, a board of directors and a managing director are able to bind the company and enter into contracts on its behalf even if there are internal limits on their power to do so (e.g. in the company's articles of association or in internal policies and protocols). However, a legal act may be considered void as against the company if the company, under certain circumstances, shows that the third party realised or ought to have realised that authority had been exceeded.

Last modified 8 Feb 2021

As far as third parties are concerned, directors are able to bind the company and enter into contracts on its behalf even if there are internal limits on their power to do so (e.g. in the company's articles of association or in internal policies and protocols) and notwithstanding any defect that may afterwards be discovered in his or her appointment or qualification.

Normally, the company's articles of association give the directors wide powers to manage its business and affairs as they think fit (although the articles association may also retain certain actions for shareholder approval). Directors' powers are collective, meaning that directors should act together as a group on the company's behalf.

Last modified 1 Mar 2021

Onshore UAE

The authorities and powers of directors are predominantly set out in an LLCs memorandum of association and are determined by the shareholders. Where this is not defined in a memorandum of association, the common approach is to issue powers of attorney to directors to enable them to represent the company.  These powers of attorney should generally be notarized.

Dubai International Financial Centre

As far as third parties are concerned, directors are able to bind the company and enter into contracts on its behalf subject to internal limits on their power to do so (eg in the company's articles of association).

Normally, the company's articles of association gives the directors wide powers to manage its business and affairs as they think fit (although the articles may also provide that shareholders may give the board specific directions as to its conduct). Directors' powers are collective, meaning that directors should act together as a group on the company's behalf.

For a director or board to exercise their powers in onshore Dubai, it is typically a requirement for such powers to be clearly stated and unambiguous. This is to say that certain UAE authorities (including the notary public) may insist on seeing a power that specifically refers to the task a director is attempting to carry out. In some circumstances, a power of attorney or authorising written resolutions will be requested instead of relying on the powers set out in the articles of association of a company.

Last modified 8 Feb 2021

As far as third parties are concerned, directors are able to bind the company and enter into contracts on its behalf even if there are internal limits on their power to do so (eg in the company's constitution or in internal policies and protocols).

Normally, the company's constitution gives the directors wide powers to manage its business and affairs as they think fit (although the constitution may also provide that shareholders may give the board specific directions as to its conduct).  Directors' powers are collective, meaning that directors should act together as a group on the company's behalf.

Last modified 8 Feb 2021

The board of directors generally has the power to manage the corporation, including the power to appoint and remove officers of the corporation, and approve fundamental transactions such as issuances of stock, mergers and acquisitions and amendments to the company’s charter documents. Usually, boards will appoint officers to manage the day-to-affairs of the company and delegate to them the power to bind the company on routine matters, subject to certain limitations.  Unless otherwise provided in the company’s charter, directors generally do not have the power to act alone, and decisions must be made by the board, or a committee or individual to which the board has delegated power.

Last modified 8 Feb 2021

The executive body manages all issues arising within the day-to-day activity of the company, except for those within the exclusive competence of the general meeting and supervisory board (if established).

The director(s) is able to bind the company and enter into contracts on its behalf subjects to limitations set forth by the company’s charter (i.e. entering into some contracts may require prior approval of the general meeting/supervisory board).

The sole director or the chairman of the board of directors may act on behalf of the company without a power of attorney. The company's charter may also provide for the possibility of each or some members of the board of directors to act on behalf of the company without a power of attorney. Alternatively, it can be specified in the charter that all or some members of the executive body can only act on behalf of the company without power of attorney together.

Last modified 8 Feb 2021

Directors are permitted to bind the company and enter into contracts on its behalf. Where the director does so without authority, ratification can be sought.

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