CABO VERDE LAW AND PRACTICE Contributed by: Nelson Raposo Bernardo, Joana Andrade Correia, Júlio Martins Júnior and Manuel Esteves Albuquerque, Raposo Bernardo & Associados
3.10 Payments to Directors/Officers The general meeting of shareholders or a committee appointed by the general meeting is responsible for setting the remuneration of each director, taking into account the functions performed and the economic situation of the company. The remuneration may be certain or partially consist of a percentage of the year’s profits, but the maximum percentage allocated to directors must be authorised by a clause in the company’s articles of association. All companies in Cabo Verde are required to disclose the total remuneration of the management board in the annual financial statements. Directors’ fees must also be disclosed to the tax authorities as a form of income. The law explicitly prohibits companies from granting loans, making payments on behalf of directors, or pro - viding salary advances that exceed one month’s pay. Failure to comply with these restrictions renders such unauthorised transactions and advances null and void. Additionally, corporate resolutions approving illegal benefits are voidable, and directors can be held jointly and severally liable to compensate the com - pany for any damages resulting from these breaches of their legal duties. The entire structure of the company is defined by the shareholders when the company is formed. The pur - pose of the company is determined by its sharehold - ers in the articles of association. The company and its shareholders are legally bound by the by-laws, which constitute the company’s internal regulations. As a result, shareholders collectively own the company. The shareholders have the right to appoint corporate bodies, to attend and vote at AGMs, to receive divi - dends, and other rights. They may also, in certain cir - cumstances, be called upon to finance the company. 4. Shareholders 4.1 Companies and Shareholders
reinforces liability based on breach of contractual and legal duties. The responsibility of the members of the management body towards shareholders and third parties is joint and several. It is important to highlight that the civil liability regime for members of the management body also applies to “other people entrusted with management func - tions”. In other words, it not only applies to members of the management body formally designated by the partners; it also applies to directors and managers, and not just in formal terms. 3.9 Other Claims/Enforcement Against Directors/Officers In Cabo Verde, directors and officers can be held lia - ble for criminal and civil charges. Regarding criminal liability, in certain circumstances, directors may also be subject to criminal penalties for other violations of the Corporate Law – for example: • for knowingly making a false or misleading state - ment to the public; • for knowingly preparing or approving incorrect or misleading financial statements; or • for obstructing the conduct of an audit by statu - tory auditors, or auditors appointed to conduct an extraordinary audit. Criminal and/or administrative penalties are provided for by other special laws, particularly in relation to tax, labour, health, safety and environmental violations. Directors and officers can also be civilly liable if they commit a breach of laws and/or regulations applicable to the company (breach of the articles of association or internal regulations). Liability cannot be limited and the law requires manag - ers to take out insurance. However, it may be waived by the general meeting, except in companies issuing securities admitted to trading on the stock exchange and in large companies.
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