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Representation
Unlike management authority, representative authority concerns
the (external) relations of the company with third persons. Therefore,
the possibility of delegating the representation of a company is
regulated in a more limited manner under the TCC in comparison with
the delegation of management.
The board of directors may delegate its representative powers to
one or more members of the board of directors or to third persons.
Pursuant to Art. 370/2, at least one member of the board of directors
should have the right to represent and bind the company.
Art. 367 governing the transfer of management provides for the
conditions of delegation of the management authority only. Art. 370
governing the transfer of representative authority does not expressly
require a provision in the articles of association and the preparation of
an internal regulation. Nonetheless, it is disputed among scholars
whether this Art. 370 should be considered together with Art. 367
stipulating the conditions of transfer of the management authority.
Besides this debate, in practice, the management and representative
authorities usually are exercised and therefore transferred together as a
whole.
Conclusion
The TCC regulates the authorities of the board of directors and
expressly specifies the nontransferable duties. The provision of a
clear distinction and distribution of tasks between the bodies of the
company is an important novelty of the TCC.
On the other hand, there are certain disputes governing the scope
of nontransferable duties. The inclusion of the appointment and
discharge of signatories and managers among nontransferable duties
may cause serious obstacles in practice. The appointment and discharge
of each signatory other than the persons in top management by the
board of directors will result in an immense workload.
The TCC regulates the transfer of powers by the board of directors,
which is another important novelty of the code. Accordingly, the
articles of association should enable the delegation of the management
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NEWSLETTER 2014