CABO VERDE Law and Practice Contributed by: Nelson Raposo Bernardo, Joana Andrade Correia, Júlio Martins Júnior and Manuel Esteves Albuquerque, Raposo Bernardo & Associados
commercial companies and avoid conflicts of interest. Firstly, a general prohibition is established on granting loans or any form of credit to its directors, providing guarantees for obliga - tions assumed by them or providing them with advances on salaries exceeding one month. Furthermore, it was established that, unless expressly consented to by the General Assem - bly, transactions are concluded between: • the company and the director, in their own name, directly or through an intermediary; or • the company and the director, representing a third party; and the company is one in which a director per - forms management functions. These prohibitions remain in place in the year following the termination of duties by the direc - tor and are extended to transactions concluded with companies that are in a controlling or group relationship with the one in which the contracting party is a director. Furthermore, the Commercial Companies Code establishes that during the period for which they were appointed or elected, directors can - not exercise, in the company or in companies that are in a controlling or group relationship with them, any temporary or permanent functions at the same time, under an employment or service- provision contract, or regarding entering into any such contracts aimed at providing services when a director’s duties cease. When someone who is linked to the company by an employment or service provision contract is appointed or elect - ed as a director, this contract is suspended and
is resumed immediately after the termination of duties. Unless express authorisation is given at a general meeting, the director cannot carry out, on his/her own or on behalf of others, activities competing with those actually carried out by the company, nor can they carry out functions in a competing company or be appointed on behalf of it. 4.6 Legal Duties of Directors/Officers Directors stand in a fiduciary relationship towards the company. 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 com - pany’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 tak - ing into account the interests of shareholders and employees. The duty to act diligently includes, in particular, the duty to obtain the necessary technical com - petence and sufficient knowledge of the com - pany’s activities, and the duty to act in informed terms, free from any personal interest and in accordance with criteria of business rationality. The members of the supervisory body must act in accordance with high standards of profes - sional diligence and loyalty. 4.7 Responsibility/Accountability of Directors The directors owe their duties to the company. They always have to act in the best interests of the company. As established by the law, they
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