The date of the annual ordinary shareholders meeting is fast
approaching for companies whose financial year overlaps with the
calendar year; therefore, it should be determined whether the
mandate of members of the management board will expire upon the
meeting taking place. We frequently forget that management board
membership of capital companies is, as a rule,
Pursuant to Article 202 § 1–2 of the Code of
Commercial Companies, as a rule, the mandate of a member of the
management board expires on the date of the shareholders meeting
approving the financial statements for the first full financial
year during which they performed the function of a member of the
management board and, if the member of the management board is
appointed for a term longer than one year, the mandate of that
member of the management board expires on the date of the
shareholders meeting approving the financial statements for the last full financial year
during which they performed the function of a member of the
Expiration of the mandate will give rise to serious legal
consequences, including invalidity of agreements, management board
resolutions or other managerial activities. For this reason, we
recommend a review of your articles of association and resolutions
of the Shareholders Meetings adopted so far in order to determine
whether your company has a functioning Management Board and,
possibly, what remedial actions can be taken.
At the same, please note that in joint-stock companies, members
of the Management Board perform their functions for a term under
the law and this matter should be pointed out at the next General
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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An assignment of rights under a contract is normally restricted to the benefit of the contract. Where a party wishes to transfer both the benefit and burden of the contract this generally needs to be done by way of a novation.
Determining the limits of the capacity to have rights and
obligations of a joint-stock or limited liability company
("Company") is very crucial since it directly affects the
validity of a transaction that a Company performs
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