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Resignation of a Member of the Management Board

May 2007 - Corporate & Commercial. Legal Developments by BABIC & PARTNERS Law Firm .

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In a recently published decision, the Croatian High Commercial Court held that in corporations having two-tier corporate structure, the Supervisory board (as a body resolving on appointment and revocation of members of the Management Board) is not authorised or required to resolve on resignation of the Management Board's member. The court was on the standpoint that the resignation has legal effects as of the moment of its delivery to the Supervisory board. As a result, once the Supervisory board receives a resignation of a member of Management Board, it is not to discuss such resignation, but only undertake necessary steps to appoint new member of the Management Board and register the changes with the competent registry court.

In case that the Supervisory board would fail to appoint new Management Board member after receipt of the resignation, the new member of the Management Board will be appointed by the competent registry court upon application of an interested party.

 

The decision of the High Commercial Court has shed some light into the procedure related to resignation of the Management Board members, an institute which was expressly incorporated into Croatian corporate laws by 2003 Amendments to Croatian Companies Act.

 

Contributed by Marija Gregorić, Partner at Babić & Partners

 

 

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