A Comparative Study of the General Duties of Company Directors in Iran and UK Law

Document Type : Original Article

Authors

1 Ph.D. Candidate, Faculty of Law, Shahid Beheshti University, Tehran, Iran

2 Ph.D. Candidate, Faculty of Law & Political Sciences, University of Tehran, Tehran, Iran Corresponding Author Email: saadati.amir@ut.ac.ir

3 Assistant Professor, Faculty of Judicial Law, University of Judicial Sciences & Administrative Services, Tehran, Iran

Abstract

Transparency and clarity of regulations governing the actions of economic activists are goals pursued by developing and developed countries. Achieving these goals relies on the adoption of precise and effective regulations. This article attempts to explore, with a focus on the Companies Act 2006 of the United Kingdom and the rulings of its courts, and the alignment of these provisions with the laws governing commercial companies in Iran, whether managers have duties beyond their formal responsibilities in managing the company towards stakeholders regarding the management of the company and the achievement of its goals? It should be examined whether, in addition to the formal duties specified in Iranian law in cases such as the manager’s lack of effort to achieve the company’s business goals or the lack of the ability required to manage the company, managers are expected to have general duties that would lead to their liability to stakeholders. Unlike the United Kingdom, Iranian laws have not explicitly and systematically addressed such duties, and the legislative focus has been on the formal duties of directors. The experience of commercial companies in Iran has shown that this lack of clarity has led to problems in the advancement of companies and the exploitation of conflicts of interest by some managers. The absence of legal requirements for individuals with specific criteria and the failure to identify key managerial responsibilities incur costs for both the company and society. This comparative article, written using a descriptive-analytical method, focuses on the obligations and duties of managers towards the company, which are sporadically mentioned in the Iranian Commercial Code without precise distinction

Keywords

Main Subjects

References

  1.  

    فارسی

    کتاب

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    قوانین

    1. قانون تجارت.
    2. لایحه اصلاحی قانون تجارت ۱۳۴۷.

    عربی

    کتاب

    1. عاملی، سید محمدجواد، محمد حسینی و محمد باقر خالصی، مفتاح الکرامه فی شرح قواعد العلامه، قم: دفتر انتشارات اسلامی جامعه مدرسین حوزه علمیه قم، ۱۳۹۷.

    References

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    Articles

    1. Isae’i Tafreshi, Mohammad, Habib Ramezani Akordi and Hamidreza Abbasi Manesh, “Enhancing Company Success: A Duty for Directors (A Study in Iranian and English Law)”, Comparative Legal Studies Journal, Volume 19, Issue 4, 2015, pp: 123-148. (in Persian)
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    1. Pour-Rezaei, Ali, Ali Gharibeh and Hassan Pashazadeh, “Rule-Making and Its Objectives in the Scope of General Duties of Directors in Joint-Stock Companies (A Study in Iranian and English Law)”, Private Law Research Quarterly, Volume 11, Issue 43, 2023, pp: 149-180. (in Persian)

    Thesis

    1. Aldahmash, Abdollah Nasser. “Powers, Duties, and Liabilities of Company Directors: A Comparative Study of the Law and Practice in the UK and Saudi Arabia”, PhD Thesis, Lancaster University, 2020.
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    3. Guezel-Kerdavid, Alan, “The Protection of Corporate Interests in the Light of Its Sanctions”, Master’s Thesis, University of Nantes, 2022. (in French)

    Laws

    1. Companies act 2006.
    2. Insolvency act 1986
    3. The Amended Bill of the Commercial Code (in Persian)
    4. The Commercial Code. (in Persian)
    5. UK Corporate Governance Code 2018. 

    Internet Resources

    1. Peters, Nichola. Michelle De Kluyver., Jaya Gupta. “Addleshaw Goddard LLP”, Available at: Directors’ Duties: The UK Perspective - Global Investigations Review, Last Visited: (29/3/2023).

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History

  • Receive Date: 06 February 2024
  • Revise Date: 20 July 2024
  • Accept Date: 31 July 2024

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