The notion of de facto director and comparison of his liability with a de jure director in the commercial companies (a comparative study of Iran and French law)

• Published in: پژوهشنامه حقوق تطبیقی Vol. 2; no. 1; pp. 106 - 127
• Main Author: Peiman Hosseini
• Format: Journal Article
• Language: English
• Published: University of Mazandaran 01.03.2016
• Subjects: civil liability; commercial company; criminal liability; de facto director; de jure director
• ISSN: 2423-7566
• DOI: 10.22080/lps.2018.11695.1118

Management is one of the most important components of a commercial company. A company director is not only the representative of legal personality, but also a decisive element in promoting the company's objectives and preserving the shareholders' capital. Due to the sensitivity of the position and extent of the directors' power in a company, the legislators, both France and Iran, have tried to appeal to the legal leverage to limit the directors' authority to prevent jeopardizing the capital and rights of shareholders and third parties. Of course, the civil and criminal liability of the "de jure director" of companies are clearly defined in the French and Iranian trade codes despite all its shortcomings. But in some companies, in the absence of a "de jure director", other partners or third parties, without having done the legal formalities, carry out the responsibility of management of the company. These persons are recognized under French law as a "de facto director" and their civil and criminal liability is determined. Although in some cases it seems that the "de jure director" responsibilities had not included a "de facto director", he should bear wider responsibilities under general rules. Unfortunately, the concept of "de facto director" is not yet defined in the Iranian Commercial law and this legal vacuum not only provides violation of the rights of shareholders but also multiple litigation in the courts.