CABO VERDE LAW AND PRACTICE Contributed by: Nelson Raposo Bernardo, Joana Andrade Correia, Júlio Martins Júnior and Manuel Esteves Albuquerque, Raposo Bernardo & Associados
Civil Responsibility Towards the Company Article 79, paragraph 1 of the CSC establishes the principle that the members of the management body are answerable to the company for damages caused to it by breach of legal and contractual duties. A pre - sumption of guilt is attributed to the members of the management body, which may be revoked “if they prove that they acted without fault”. Responsibility is joint among the directors. The operation of the civil liability mechanism of the members of the management body towards the com - pany depends on the deliberation of the shareholders, taken by an absolute majority, and must be proposed within a period of six months counting from said delib - eration. For the exercise of the right of compensation, the partners may appoint special representatives. The civil liability of administrators can even be triggered during the meeting that considers the financial state - ments, although this matter is not included in the notice. Civil Liability Towards Social Creditors The civil liability of the board of directors towards creditors arises from culpable non-compliance with legal or contractual provisions intended to protect the creditors, when the social assets become insufficient to satisfy the respective creditors. The protection of corporate creditors is reinforced, as the compensation obligation cannot be excluded by the company’s resignation or transaction, or by fact or omission based on a resolution of the general meeting. Creditors’ rights may even be exercised during the insolvency process by the administration of the insol - vent estate. Civil Liability Towards Shareholders and Third Parties Finally, the Companies Code establishes a civil liability regime for the management body towards partners and third parties for damages directly caused to them in the exercise of their functions. This regime is com - plemented by the provisions of the Civil Code, which
they carry out functions in a competing company or be appointed on behalf of it. 3.6 Legal Duties of Directors/Officers Directors have a fiduciary relationship with the com - pany. Directors are expected to act in good faith and in the best interest of the company at all times. This involves preserving the company’s assets as well as furthering the company’s business interests. In general, directors must conduct the company’s affairs with the due care of a prudent and diligent business person, in particular in accordance with the applicable laws and the articles of association (duty of legality) and taking into account the interests of shareholders and employees. The duty to act diligently includes, in particular, the duty to obtain the necessary technical competence and sufficient knowledge of the company’s activities, and the duty to act in informed terms, free from any personal interest and in accordance with the criteria of business rationality. The members of the supervisory body must act in accordance with high standards of professional dili - gence and loyalty. 3.7 Responsibility/Accountability of Directors Directors owe their duties to the company. They always have to act in the best interests of the com - pany. However, as established by law, they should also take into account, to a certain extent, the inter - ests of the shareholders, creditors and employees of the company. 3.8 Breach of Directors’ Duties The Companies Code organises the topic of directors’ civil liability into three large groups: • civil liability towards the company (Articles 78 and 79 of the CSC); • civil liability towards social creditors (Article 84 of the CSC); and • civil liability towards shareholders and third parties (Article 85 of the CSC).
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