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Companies Internal and External Relations

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COMPANIES INTERNAL AND EXTERNAL RELATIONS (7/11/02) Within certain limits companies may act the same way as a natural person. However, the question of who may act in order to commit the company is amore complex than in the case of a natural person. The latter act purely by themselves for themselves. This is because a natural person is an 'indivisible' being. Companies are 'composite' beings, they act through their organs. ...read more.


Internal Relations To what extent must those who act for the company take account of the other organs' interests. More particularly to what extent must the directors take account for shareholders interest? The answer is that the directors must act exclusively in the interests if the company. The interests of individual shareholders must not take precedence over his obligations. If the directors are thought to have failed in this duty, it will be the company as a person, and not individual shareholders, who can take action against them. ...read more.


The companies act also provides certain safeguards in this regard. External Relations Companies must act through natural persons, in most cases this are the directors. Directors must perform their duties within the limits of the powers conferred on them In most cases they do this only because if they do not they can be found out at the Annual General Meetings. However, of the outsider colluded in the unlawful action, he /she will no longer be protected by this assumption. Company executives also have certain implied powers. There's do not require any express authorisation on behalf of the company's decision making organs. ...read more.

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