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The Corporate interest in Belgian company law Chaire Hoover UCL 1 October 2007 Prof. dr. Alain François.

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Presentation on theme: "The Corporate interest in Belgian company law Chaire Hoover UCL 1 October 2007 Prof. dr. Alain François."— Presentation transcript:

1 The Corporate interest in Belgian company law Chaire Hoover UCL 1 October 2007 Prof. dr. Alain François

2 Key concept in corporate law Corporate interest = statutory concept –Numerous explicit and implicit references in Belgian Companies Code (“BCC”): example Art. 36 BCC (use of company goods) Artt. 444 and 602 BCC (contribution in kind) Art. 510 BCC (transfer restrictions) Art. 551 BCC (voting agreements) Art. 540 BCC (right to ask questions at GM) … –Other statutory references in a.o. financial corporate laws See eg. Artt. 9 Act of 1 April 2007 on Public Takeover Bids and 28 Royal Decree of 27 April 2007 on same

3 Key concept in corporate law (continued) Innumerable references in case law: –Directors’ liability cases –Validity of corporate decisions –Corporate litigation –… Clear presence in Corporate Governance Codes –See e.g. principle 2 (provision 2.1) Lippens Code

4 Corporate interest is a blank concept/rule Absence of a clear and unambiguous statutory definition Absence of a general statutory rule to further the corporate interest Deliberate non-interference of company legislator

5 Controversy: definition of corporate interest No consensus on definition of corporate interest Central issue is how to deal with partial interests? At least four possible definitions can be distinguished: (i)“Narrow” shareholder-oriented definition (ii)“Broad” stakeholder-oriented definition (iii)Variable “mixed” definition - definition varies depending on type of decision, type of company and/or factual circumstances (iv)Negatory definition - corporate interest has no legal relevance

6 Narrow definition of corporate interest Classic definition: corporate interest = interest of the shareholders to make profit Finely tuned definition: corporate interest = dynamic and future-oriented collective profit interest of the shareholders Finds legal base in Art. 19 BCC: “a company (contract) is to be entered into (incorporated) [and performed] in the common interest of the parties (shareholders)” Interests of other constituencies may influence collective profit interest, but should be weighed against corporate interest

7 Broad definition of corporate interest Several types of broad definitions: –Corporate interest defined as the resultant of the assessment and weighing of all relevant stakeholder interests –Corporate interest = interest of the enterprise Broad definitions all come down to discounting, in one way or the other, the partial interests of all stakeholders in the definition of corporate interest Broad definitions are extremely vague and lack a solid legal base de lege lata

8 Elements of debate Should the protection of stakeholder interests be organized via the duty of corporate bodies to further the corporate interest? Should the legislator intervene in the debate on the definition of corporate interest? If affirmative, can such intervention be limited to the introduction of a statutory definition?


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