Highest Court Opens Doors For Management Self-Dealing

Absent ade­quate pro­tec­tion by law, the company's cor­po­rate doc­u­ments must pro­vide addi­tional com­fort and pre­vent abu­sive self-dealing.

"Self-dealing" is the signing of an agreement by an individual who acts as a representative (agent) of one of the parties and at the same time acts in his/her own name or as a representative (agent) of the other party. Self-dealing is admissible under the Bulgarian law if the represented party consents to it (Article 38 paragraph 1 of the Bulgarian Obligations and Contracts Act).

The general understanding among practitioners is that the above principle applies to the conduct and representation of individuals. Its impact on legal entities and their representation is disputed.