Board / management structure

The board of directors is vested with the broadest powers to act in all circumstances on behalf of the company; it exercises these powers within the limits of the company's purpose and subject to those powers expressly granted by law to the shareholders' meetings.

In its relations with third parties, the company is bound even by the acts of the board of directors which do not fall within the scope of the corporate purpose, unless it proves that the third party knew that the act exceeded that purpose or it could not have been unaware of it in view of the circumstances, it being excluded that the mere publication of the articles of association is sufficient to constitute such proof. The provisions of the articles of association limiting the powers of the board of directors may not be invoked against third parties.

As far as third parties are concerned, directors may be 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.

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.

The Board's roles and responsibilities include, but are not limited to, the following:

• Adopting the commercial and financial policies associated with the company’s business performance and achievement of its objectives.
• Drawing, overseeing and periodically reviewing the company’s plans, policies, strategies and key objectives.
• Setting and generally supervising the regulations and systems of the company’s internal control.
• Determining the company’s optimal capital structure, strategies and financial objectives and approving annual budgets.
• Monitoring the company’s major capital expenditures, and acquiring and disposing of assets.
• Approving the company’s quarterly and annual financial statements and presenting them to the general assembly.
• Monitoring the executive management’s activities, and ensuring that the operations run smoothly to achieve the company’s objectives and that they do not conflict with the applicable laws and regulations.
• Forming specialized committees of the Board as required by the nature of the company's activity and as provided in applicable regulatory requirements, and issuing the regulations of these committees.
• Setting a mechanism to regulate transactions with related parties in order to minimize conflicts of interest.
• Setting standards and values governing the company’s business.
• Ensuring the application of appropriate control and risk management systems by setting a framework of the risks that the company might face, creating an environment that is aware of risk management at the company level, and transparently presenting it to company’s related parties and stakeholders.
• Assuring equitable treatment of shareholders, including the minority shareholders.
• Setting internal regulations which determine the Board’s duties and responsibilities, including the obligations and responsibilities of the directors, from which the Board is not exempt even if it forms committees or delegates certain duties to other bodies or individuals. The Board must avoid issuing general authorizations or authorizations with an unlimited duration.

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, such director 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.

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 First Schedule of the Companies Act, therefore, the two could also be deemed as a source of constraints on the director’s powers.

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.

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.

A 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 its power to do so (e.g., in the rules of procedure, internal instructions etc.).

However, a company will not be bound in cases where members of 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 a member of the executive board. 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 a member of the executive board.

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.

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.

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.

The board of directors exercises the powers of the company other than those of the shareholders in general meeting as determined by Act 992 or the company’s constitution. Acts of the board of directors while carrying on the business of the company in the usual way are considered to be acts of the company and are thus binding on it. However, no liability is incurred by the company to a person who had actual knowledge at the time of a transaction that the board of directors did not have the power to act in that manner or acted in an irregular manner, or having regard to that person’s relationship with or position to the company, should have known of the absence of power of the board of directors to act in that manner or the irregularity involved.

Directors are required to obtain the approval of an ordinary resolution of the company before exceeding the powers conferred on them and are further prohibited from specific actions without authorisation by an ordinary or special resolution, as the case may be, of the company.

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.

• 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 reflect 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.

The BOD is authorized to represent the PT in and outside of court. Basically, each director is authorized to represent the BOD, unless the articles of association provide otherwise. This means that the shareholders are free to restrict which director (or which number of directors) is authorized to represent the PT.

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.

In both SARL and SA companies, unless otherwise provided for in the articles of association, directors have full powers to commit the company with respect to third parties without having to show proof of a special instrument granting such powers.

The company is bound by acts of its management body, officers and board that are not within the company purpose, unless it can prove that the third party was aware that the act was unrelated to such purpose or could not ignore it given the circumstances. The mere publication of the articles of association is not enough to prove this.

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.

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 as a result of their negligence.

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 empower shareholders to issue specific directions to the board e.g. to hold a general meeting. Directors' powers are collective, meaning that they are exercised jointly by way of board resolutions.

As far as third parties are concerned, managers are vested with the power to bind the company and enter into contracts on its behalf. The Articles 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 signature of any two managers, but the Articles can provide for a different signature regime. All powers not expressly reserved by the law or the Articles to the general meeting of shareholders fall within the powers of the Board. Any limitation to the powers conferred on the Board is not valid against third parties even if it is published.

Subject to the Companies Act, the directors of a company shall exercise their powers in accordance with the Act and with the limits and subject to the conditions and restrictions established by the company’s constitution.

The business and affairs of a company shall be managed by, or under the direction or supervision of, the director/s.

The director/s shall have all the powers necessary for managing, and for directing and supervising the management of, the business and affairs of the company.

In most cases, the board of directors/managers or the sole director/manager are, because of their position in a company, granted all powers of attorney, which in general terms can include acts of ownership, administrative acts, lawsuits and collections, the ability to open bank accounts, issue or endorse debt securities, labor and employment activities and tax activities.

Furthermore, Chief Executive Officers (Director General) that run publicly traded companies are vested with the broadest powers to represent the company for (i) acts of administration, (ii) lawsuit collections, including special powers that, according to the law, require a special provision, and (iii) acts of ownership with certain limitations established by the board of directors. It is important to point out that the CEO of a S.A.B. is a body of the company, and they are in charge of running the day-to-day operations of the company and for ensuring that the strategic policies and controls set up by the board of directors are applied.

The oversight of a S.A.B. CEO’s performance is a function that is delegated by the board of directors to an Audit Committee (Comité de Auditoría) and to a Corporate Practices Committee (Comité de Prácticas Societarias). The Audit Committee must have a majority of independent directors.

The director is the legal representative of the company. Therefore, they have the legitimate authority to take any decision for the benefit of the company. They also have the powers to sign any document on behalf of the company, together with banking powers which allow them to manage the company's bank account and other banking operations.

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

In Lda and SAS companies, directors’ powers are general management powers and any specific powers conferred to them should be reflected in the company´s articles of association.

In SA companies, in addition to the general management powers and those specifically conferred on directors, the New CCom establishes the following specific powers for the Board of Directors:

• choice of its chairperson, where the articles of association so provide;
• co-opt directors;
• request the convening of a General Assembly;
• approval of the management report and annual accounts for submission to the approval of the General Assembly;
• acquisition and sale of real estate;
• provision of security or guarantees, personal or real, by the company;
• opening and closing of commercial premises (estabelecimentos comerciais);
• changing the company´s organization;
• extension and reduction of the company´s articles of association;
• projects of merger, division or transformation of the company to be submitted to the General Assembly´s approval;
• establishment and termination of cooperation with other companies;
• change of registered office;
• increase of share capital, when the articles of association allow for authorized share capital, up to the authorized limit;
• issuance of bonds under the terms prescribed in the articles of association; and
• any other matter on which any director requires resolution by the Board of Directors.

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

Under common law, the directors are empowered to do whatever is reasonably necessary and incidental to the management of the company’s business.  The articles of association of a company usually provide for the specific powers of the directors. 

The Companies Act contains certain restrictions on the powers of directors.  The articles may also impose further restrictions on the powers of directors.

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.

In principle, the power of representation accrues to each director individually and is unrestricted and unconditional. The articles of association may deviate from this, for example by stipulating that directors must act jointly. Such restriction applies to all matters and not to certain matters only. This restriction must have been registered with the Dutch Chamber of Commerce in order to invoke it against third parties.

In the event of a breach of the power of representation arising from the law or the articles of association, the company shall in general not be bound by the contract.

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). This is commonly referred to as the "indoor management rule" and entitles third parties who deal with a company to presume that all internal company procedures to secure the necessary authority have been taken. Since being codified in New Zealand under the Act, recent case law has confirmed a more limited application of the protection afforded by this rule to third parties dealing with a company director exercising powers that they would customarily have authority to do.

Normally, a company's constitution gives its directors wide ranging powers to manage the company’s business and affairs as they see fit, though the constitution may provide that shareholders can direct  the company’s business and affairs, or reserve certain powers for the shareholders to exercise. Directors' powers are collective, meaning that directors should act together as a group on the company's behalf.

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 such person acts as such on behalf of the company, the company is bound by such person's acts.

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 can 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.

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.

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), i.e. the internal restrictions are not effective towards third parties. 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).

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.

The authorities and powers of directors are predominantly set out in an LLC’s 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 are typically notarised.

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 that 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 or the decisions of the company's bodies limiting the powers granted by law to the statutory bodies are not enforceable against third parties, even if published.

The authorities and powers of directors are predominantly set out in an LLC's articles of association and are determined by the shareholders. Where this is not defined in the articles 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 notarised.

In relation to shareholders and in the absence of determination of their powers by the articles of association, the director may perform all acts of management in the interest of the company.

In relation to third parties, the director is invested with the most extensive powers to act in all circumstances in the name of the company, subject to the powers expressly attributed to the shareholders.

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 with 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.

Each director is authorised to act on behalf of the company independently, unless the Articles of Association stipulate otherwise (e.g. that two directors must act jointly).

The scope of powers may be limited by the Articles of Association or by general meeting (or sole shareholder). However, such limitation is not effective towards third parties.

The company's business management must be distinguished from the company's representation. While representation of the company is carried out externally in relation to third parties, business management relates to the internal management of the company. According to the Slovak Commercial Code, where decisions fall within the company's business management, the consent of a majority of the directors is required, unless the Articles of Association require a higher number of votes.

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.

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 them. 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.

The board of directors is responsible for the organisation of the company and the management of the company's affairs. The management of the company's affairs includes all matters where the shareholders' meeting does not have the exclusive right to make decisions. 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.

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 their 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.

In a limited liability company, the shareholders may freely decide in the bylaws the powers of the manager in the manager's relationship with them. Thus, in the absence of any stipulation in the bylaws limiting the powers of the manager, the manager remains legally free to perform all acts which they consider necessary for the interests of the company and which fall within the scope of its corporate purpose.

The manager is also often invested with extensive powers to act on behalf of the company towards third parties. Thus, the shareholders may opt for a system of total freedom granting the manager all the powers, or a system which prohibits the manager from carrying out certain specific acts or which obliges the manager to submit some decisions to an authorization of the general assembly. If the powers of the manager are exceeded in these circumstances, this is considered to be a contractual breach which makes the manager liable to the shareholders.

Tunisian company legislation provides that in its relations with third parties, the company is bound by all acts performed by the manager, and that the articles of the bylaws limiting the powers of the manager are not enforceable against third parties, even in case of publication of the bylaws.

This article is intended to protect third parties, however, it is not an absolute protection in all cases. When the act committed by the manager falls within the sphere of the company's object, there is absolute protection for third parties. However, when the manager commits any act exceeding the company's object, the protection enjoyed by third parties is only relative since the company can be exonerated from liability if it can prove the bad faith of the contracting third party. It can do this simply by proving that the third party was aware of the overrunning at the time the act in question was committed.

Directors manage the affairs/business of the company and exercise all powers except those reserved for shareholders by statute or by the company's articles such as alteration of capital, variation of rights or borrowing beyond the company’s share capital.

Acts of directors are binding on the company, and the power of the board to bind the company against third parties cannot be limited by the company’s constitution. Third parties are not required to inquire into the internal affairs or management procedures of a company such as limitations on the powers of the board or its delegates. Additionally, the acts of a director remain valid notwithstanding subsequent discovery of a defect in their appointment.

Directors powers are usually collective, except that the companies articles may allow for certain functions to be performed by a particular number of directors rather than the whole board.

Onshore UAE

The authorities and powers of directors are predominantly set out in an LLC's 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 notarised.

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 (e.g. 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.

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.

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.

The Companies Act provides that the board of directors may exercise all such powers of the company as are not required to be exercised by the members by the Companies Act or articles of association.

The Companies Act also provides that  the board of directors may exercise the powers of the company to:

• borrow money
• charge any property or business of the company, including any of its uncalled capital, and
• issue debentures or give any other security for a debt, liability or obligation of the company or of any other person.

The board of directors also have power to appoint a person to be the attorney of the company for such purposes, periods an subject to such conditions as the board of directors considers appropriate. The appointment must be made by way of a power of attorney.

Any two directors or number of directors determined by the board of directors must sign, draw, accept, endorse or execute all cheques, promissory notes, bankers drafts, bills of exchange and other negotiable instruments, including receipts for money paid to the company.

The board of directors however, require the approval of the shareholders by ordinary resolution to do the following:

• sell, lease or otherwise dispose of the whole, or substantially the whole, of the undertaking or assets of the company
• issue any new or unissued shares in the company
• create or grant any rights or options entitling the holders to acquire shares of any class in the company, or
• enter into a transaction that has or is likely to have the effect of the company acquiring rights or interests or incurring obligations or liabilities, including contingent liabilities, the value of which is the value of the company’s assets before the transaction.

Such approval is required for each specific transaction.

The validity of any transfer or disposition of property to a person dealing with the company, in good faith, shall not be affected by a failure to of the directors to obtain the necessary approval whether from the board of directors or from the shareholders.

Further, the Companies Act provides that a decision made by an officer of a company shall, subject to the requirements as to disclosure, be considered valid if:

• the decision is made in good faith for a proper purpose
• the officer does not have a personal interest in the decision
• the company is appropriately informed of the subject matter of the decision, and
• the officer reasonably believes that the decision is in the best interests of the company.

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.