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.
A director must be a natural person who is at least 18 years of age. For a proprietary company, at least one director must ordinarily reside in Australia.
A director must be at least 18 years old, but there are no nationality or residency restrictions (for corporate law purposes). It is not possible to appoint legal entities as directors, only individuals.
There are no nationality or residency requirements imposed on directors. It is also possible to have a legal entity (Belgian or foreign entity) appointed as director - in which case however the legal entity must appoint a “permanent representative” (i.e. a natural person who represents that legal entity when carrying out the director’s mandate in the company). Note that a natural person cannot have a seat in the same management organ twice (i.e. in his/her own name and as a permanent representative of a legal entity).
A director must be at least 18 years old. At least one director in the board of directors must be resident in Botswana however there are no nationality restrictions.
The following persons are disqualified from being appointed or acting as directors of a company:
- A body corporate.
- A person who is under the age of 18.
Except with the leave of the court:
- An unrehabilitated insolvent.
- Any person who has at any time been convicted in Botswana or elsewhere of theft, fraud, forgery or altering a forged document, or perjury and has been sentenced therefore to serve a term of imprisonment without the option of a fine or to a fine exceeding BWP5000.
- Any person removed by a competent court from an office of trust on account of misconduct.
- In relation to a particular company, any person who does not comply with any qualifications for directors contained in the constitution of that company.
- Any person who is prohibited by law from being a director or promoter or being concerned or taking part in the management of a company.
- Any person of unsound mind.
The following persons cannot be appointed as board members:
- Minors (aged less than 18 years old).
- Directors whose appointment has been revoked due to the rejection of the balance sheet by a shareholders' meeting.
- Persons with certain criminal records (including bankruptcy crime).
- Authorities regarding entities that they, directly and in accordance with the law, supervise or control.
There are other restrictions applying to directors of listed (open) corporations or their affiliates, such as being a senator, congressman, state minister, CMF (Comisión para el Mercado Financiero) officer, stockbroker, etc.
Directors may be local or foreign, except in the case of certain industries.
A director must either be a natural person with full legal capacity or a legal person. If a legal person is appointed, it must authorise a natural person to represent it in the body (i.e. be the director); otherwise, the legal person is represented by a member of its governing body. Any such authorised person must fulfil all the eligibility requirements applying to a natural person who wishes to become a director.
Furthermore, a director has to be a person not lacking integrity within the meaning of the Czech Trade Licensing Act, must not have anything which is an obstacle to a trade and must not be a person whose property (or the property of a company in which he has worked or has held the same position in the last three years) has been the subject of insolvency proceedings.
A director is required to be at least 18 years old and must not be under guardianship. A director may only be a natural person and thus a corporate director is not feasible under Danish law. Foreign individuals may be elected as directors as there are no nationality or residency restrictions to be met in order to be eligible for election.
A director must not be under 18 years old, under guardianship, a person with restricted legal competency, bankrupt or a person banned from doing business.
At least one ordinary member and one deputy member of the board of directors must be resident in the European Economic Area (EEA). A managing director (and any substitutes) must be resident in the EEA. However, the Trade Register Authority can grant dispensation from this requirement.
It is not possible to have a corporate director.
French law does not provide for any restriction relating to the President or any General Manager/Delegated General Manager, therefore they:
- May be an individual or a legal entity.
- May be of French or non-French nationality.
- Need not have specific qualifications.
- May be of any age.
The bylaws of the company may impose any of these types of restrictions though.
A managing director must be a natural person and contractually capable without any restriction, i.e. at least 18 years old. There are no restrictions as to nationality or residency. However, if the company only has managing directors who are non-German residents, this may be detrimental from a tax law perspective.
Persons who have been convicted for certain crimes such as a delayed filing of insolvency (Insolvenzverschleppung), other insolvency crimes, false declarations when founding a limited liability company or fraud within the past five years are not eligible to become a managing director.
There are no nationality or residency requirements, but the following eligibility requirements should be noted.
A director must be at least 18 years old.
A person who is an undischarged bankrupt must not act as director of a company, except with the leave of the court. Also, any person who has been disqualified from acting as a director must not act as a director. The company’s articles of association will also usually provide for additional eligibility requirements.
It is possible to have a corporate director, although at least one other director must be a natural person and the company (which is appointing the corporate director) cannot be a member of a group of companies which includes a listed company.
Directors must meet the following criteria:
- They must be of legal age and have full legal capacity.
- They must not be prohibited from practicing their profession by a final judgment; any person who has been prohibited by a final judgment from practicing a specific profession cannot serve as a director of a company that is engaged in the activity indicated in the judgment.
- They must not be subject to a disqualification order.
- Any person who has been sentenced to imprisonment by a final judgment for committing a crime cannot be a director until released from the consequences of having a criminal record.
If the director is a legal person (e.g. a company), it must designate a natural person (individual) to perform the director’s functions in its name and on its behalf. The rules applicable to directors shall also apply to this designated person.
In general, Hungarian law does not prescribe nationality or residency requirements for directors in a Hungarian company. However, sectoral legislation may set specific requirements (e.g. the board of directors of Hungarian banks must include at least two directors who are Hungarian residents for foreign exchange purposes).
A director must be at least 18 years old, but there are no nationality or residency restrictions. It is not possible to have a corporate director in Ireland.
A director must be at least 18 years old, but there are no nationality or residency restrictions. It is possible to have a corporate director.
According to the Italian Civil Code, the disqualified, the disabled, the bankrupt, or whoever has been condemned to a penalty that implies disqualification, even temporary, from public office or the inability to exercise managerial offices, cannot be appointed as a director and if appointed he/she lapses from his/her office or offices.
There are no nationality or residency restrictions to become a director.
It is not possible to have corporate directors. In addition, the Companies Act prevents the following persons from being a director:
- An adult ward, a person under curatorship under Japanese law, or a person treated equivalent under foreign law.
- A person who has been sentenced to a penalty for violating the Companies Act or certain other laws, for whom two years have not passed from the date when the execution of the penalty was completed or when the penalty no longer applied.
- A person who violated other laws, who was sentenced to imprisonment or a more severe penalty and has not completed the execution of the penalty or to whom the penalty still applies (excluding a case where the execution of the penalty is suspended).
Any person aged 18 years and above can be appointed a director. The Companies Act does not prescribe an age at which directors should retire.
It is possible to have a corporate director, although at least one director of a company must be a natural person.
There are no restrictions on nationality or residency on the appointment of a director. Some sectoral laws such as those relating to insurance require that at least one-third of directors are local directors. This limits the number of foreigners that may be appointed to the Board of an insurer.
Adjudged bankrupts are disqualified from appointment as directors without approval from the court. Persons may also be disqualified by a court order for reasons such as conviction of an offence, fraud, insolvency of the company among others. The company may also disqualify certain persons through its articles of association or shareholders’ agreement.
The manager can be a shareholder, a third party, a natural or a legal person, having full legal capacity to act. Any person of legal age (or emancipated minor) may be a manager.
There are no nationality restrictions or requirements applying to managers.
A person who is at least 18 years old, regardless of their nationality, may be appointed as a director of a company. The Commercial Code indicates that a person who is barred by special law, has been condemned of corruption related crimes, embezzlement, crimes against the environment or who has been barred from public office through a criminal penalty is ineligible to be a director of a company. Note also that, in case of foreign persons, the procedures for contracting foreign employees must be observed.
In the event of a legal person being appointed as a director, it must appoint an individual to exercise the office as their representative. The legal person must share liability with the individual appointed.
Directors can be legal entities or natural persons, however, non-executives and supervisory directors must be natural persons. The articles of association may restrict the scope of and requirements for persons eligible for appointment as a director. Such requirements may be waived by a resolution of the general meeting.
From a corporate law perspective a director can be either Dutch resident or resident in any non-Dutch country. However, often tax substance rules require that at least 50% of the directors are actually Dutch (tax) resident.
In the event that a company meets for two consecutive years certain criteria under the Dutch law and accounting rules concerning its asset value, turnover and number of employees (Qualifying Company), restrictions with respect to the appoint of directors are applicable. These restrictions are applicable when a corporation meets for two consecutive years at least two out of the three following criteria:
- An asset value exceeding EUR20 million.
- A net turnover exceeding EUR40 million.
- At least 250 employees.
In a Qualifying Company, a person cannot be appointed as a director (other than a non-executive director or a supervisory director) when such person is either:
- A supervisory director or a non-executive director for more than two other Qualifying Companies.
- The chairman of the supervisory board or - if the tasks of the directors are divided between executive and non-executive directors – the chairman of the board of directors, of another Qualifying Company.
A person cannot be appointed as a non-executive director or supervisory director when such person is non-executive director or a supervisory director for five or more other Qualifying Companies. An appointment as chairman counts as two appointments.
There are no nationality or residency restrictions. However, a foreign director must have a duly issued Combined Expatriate Residence Permit and Aliens Card (CERPAC) where the director provides a Nigerian address as his or her residential address. Additionally, a director must be at least 18 years of age, must be of sound mind and must not be insolvent. A director must also not have been disqualified by the courts or a regulatory authority.
A corporation cannot be a director and must appoint a representative.
Only persons over the age of 18 may be elected as members of the board of directors.
At least 50% of board members must reside in Norway or be a citizen and resident of an EEA country. If appointed, the general manager must also reside in Norway or be a citizen and resident of an EEA country. It is not possible to have a legal person (e.g. a company) serving as a member of the board of directors or as a managing director.
Anyone employed in the company at the date of election may serve as an employee representative and anyone employed in the company on the election date may vote on their election.
The legal impediments for an individual to be a director are the following:
- Those persons incapable.
- Persons who are bankrupt.
- Persons that due to their position or duties are barred from engaging in commerce.
- Officials and public servants serving in public bodies whose functions are directly linked to the economic sector in which the company conducts its business activity, except if they represent the Government´s participation in those companies.
- Persons who have pending litigation with the company as plaintiffs or who are subject to a corporate liability action initiated by the company and those who are prevented by mandate of an injunction issued by a judicial or arbitral authority.
- Persons who are directors, administrators, legal representatives or agents of companies or partners of partnerships that have interests permanently opposed to the company or who personally have permanent opposition to its interests.
A management board member must be at least 18 years old, but there are no nationality or residency restrictions (however, a person who has been validly convicted of certain offences specified in Polish law cannot be a management board member). It is not possible to have a legal person as a management board member.
A director must be at least 18 years old, but there are no nationality or residency restrictions. 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.
A director may be either a legal entity or individual with full legal capacity. If a legal entity is appointed as director, such entity must designate an individual to act as its permanent representative.
The managers/members of the executive board may only be individuals with full legal capacity.
Persons who, according to the law, are incapable or have been denied by final court judgment the right to exercise the capacity of director as a complementary sanction for crimes involving breach of trust, corruption, embezzlement, forgery, tax evasion, money laundering, as well as for other criminal offences provided by the Company Law, cannot be appointed as directors. If such persons have already been appointed as directors, they must be revoked. The same rules apply to managers and members of the supervisory board.
Only an individual may act as a Director except when the powers are assigned to a manager (this may be an individual entrepreneur or a legal entity) by a decision of the participant (general participants meeting) and on the basis of the relevant (management) agreement with such manager. As for BoD members, only individuals may be appointed as such.
Russian corporate law does not establish additional requirements for being elected a Director or a BoD member. However, additional requirements may be prescribed by special federal laws. For example, the Director has to conclude an employment agreement and abide by Russian labour law provisions (eg if the Director is a foreign citizen he/she must have a Russian work permit). Furthermore, a member of the Russian Parliament cannot be appointed as a Director or BoD member.
Section 145 of the Act provides that a director must be a natural person of at least 18 years old and of full legal capacity. At least one of the directors has to be ordinarily resident in Singapore. Additional criteria include, inter alia, the following:
- A resident director must a Singapore Citizen, Singapore Permanent Resident or EntrePass holder (note: if the individual is an Employment Pass (EP) holder, he or she must first get a Letter of Consent (LOC) from the Ministry of Manpower before being appointed as a director of a company in Singapore).
- A director must not be disqualified from acting as a director of a company by virtue of, e.g. being declared an undischarged bankrupt or being disqualified under statutes including but not limited to, the Act, the Banking Act (Chapter 19), the Financial Advisers Act (Chapter 110), the Insurance Act (Chapter 142) and the Monetary Authority of Singapore Act (Chapter 186).
Corporate directors are not allowed or recognised under Singapore law.
A director must be a natural person who is least 18 years old. It is not possible for a company to appoint corporate directors. There are no nationality or residency restrictions on the appointment of directors.
Everybody (shareholder or not) is eligible to be a director, and a director is not required to be a Spanish resident. It is possible to be a natural person or a legal entity. In the latter case, the legal entity must appoint a representative for the performance of its functions as director.
The above is the general rule. However, Spanish law establishes some exceptions for certain people who cannot be directors:
- Non-emancipated minors and judicially incapacitated persons.
- People judicially disqualified under the Insolvency Law, for the period of disqualification.
- People convicted of certain crimes.
- Those who, due to their position, cannot carry out commercial activities.
- Civil servants whose functions are related to the activities of the company.
- Judges and magistrates.
- Whoever is affected by other legal incompatibilities (e.g. auditors of the company's accounts and those engaged in the same commercial activity or analogous).
Each member of the board of directors and the managing director (if appointed) must be at least 18 years old. He or she must not be declared bankrupt, be prohibited from carrying on business or have a guardian. It is not possible to have a legal person (e.g. a company) serving as a member of the board of directors or as a managing director. There are no nationality restrictions.
At least half the members of the board of directors, at least half of the deputy board members and the managing director (if appointed) must reside within the European Economic Area. Exemptions to these residency requirements can be granted by the Swedish Companies Registration Office.
A director must be at least 21 years old, but there are no nationality or residency restrictions. It is possible to have a corporate director, although at least one other director must be a natural person.
If the director is an individual, he or she may hold office provided that:
- He or she has not been disqualified by a court from being a director (a court can overturn previous disqualifications).
- He or she has not attained the age of 70 (unless this requirement is waived by shareholder resolution).
- He or she has not been declared bankrupt/insolvent (unless allowed by a court).
- He or she has not been convicted of any offence in connection with the promotion, formation or management of a company.
- He or she has not been persistently in default in relation to provisions of the CA requiring any return, account or other document to be filed with, delivered or sent, or notice of any matter to be given, to the Registrar of Companies.
- In the course of winding up a company it appears that he or she has not been guilty of an offence.
An appointment must also comply with the provisions of the company's articles of association. These can contain whatever rules the shareholders agree, for example, limitation of the number of family relatives who are also directors.
However, please note that there are local content requirements which are sector specific. These may impact on who can be appointed as a director and/or composition of your directorship structure.
A director must be a natural person who is at least 18 years old. There are no nationality or residency restrictions, however individuals from certain countries may be subject to additional security checks or denied a visa. A director in an onshore LLC must hold a valid UAE visa.
In some circumstances, a director may be required to hold a minimum legal of academic qualification in order to hold office, depending on the activities that the LLC is conducting (for example if the LLC conducts regulated financial activities).
Dubai International Financial Centre
A director must be a natural person who is at least 18 years old. There are no nationality or residency restrictions, however individuals from certain countries may be subject to additional security checks or denied a visa.
An individual may not be a director if they are:
- Convicted of a criminal offence, involving dishonesty or moral turpitude, in any jurisdiction in the past ten years.
- Guilty of insider trading or the equivalent in any jurisdiction at any time.
- Judged disqualified by any court.
- Disqualified by the Dubai Financial Services Authority.
- Disqualified pursuant to a provision specified in the articles of association of a company.
- An undischarged bankrupt.
A director must be at least 16 years old, but there are no nationality or residency restrictions. It is possible to have a corporate director, although at least one other director must be a natural person.
The directors of a corporation are elected at the annual meeting of stockholders. Only persons elected by the stockholders can serve as director, with the caveat that regulatory schemes imposed by other US laws may limit a person’s ability to serve as a director. The board of directors also have the power to appoint new directors, generally when there is a vacancy on the board due to a resignation or death or when the size of the board is expanded. In the U.S., there is generally no employee representative on the board.
Some examples of other limiting regulatory regimes are:
- For publicly-traded corporations, the Securities and Exchange Commission and stock exchange listing requirements provide for certain independence, financial sophistication, “director overboarding” and other requirements.
- The Securities and Exchange Commission limits the ability of certain “bad actors” (such as individuals who have committed fraud or other crimes) to serve as a director of a company offering or selling securities.
- The Clayton Antitrust Act limits the ability of directors to serve on the boards of directors of certain competitive companies.
- The Committee on Foreign Investment in the United States (CFIUS) may determine that a certain corporate transaction (such as a merger whereby a board is replaced with foreign nationals) is improper because it violates national security.
Additionally, a company’s charter documents may provide for other director qualifications, such as minimum or maximum age requirements, or a requirement that the company’s chief executive officer serve on the board of directors.
As a general rule, a director must be a natural person at least 18 years old. A person to be appointed as the director of the company should be a Ukrainian resident at the stage of incorporation. Once the company is incorporated, the Ukrainian director can be replaced with a foreign director subject to first obtaining a work permit and a Ukrainian tax ID.
- Must be at least 16 years old, and must not be a body corporate.
- Must not be a person who has been removed by the court from any office of trust on account of misconduct save with the leave of the court.
- Must not be a person who has at any time been convicted whether in Zimbabwe or elsewhere, of theft, fraud, forgery or perjury.
- Must not be a person who has ever been sentenced for any of the crimes listed above and served a term of imprisonment without the option of a fine.
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.
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.
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.
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.
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.
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.
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.
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).
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?
- 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.