Amendment of the Business Corporations Act – Part 2

We are back with more novelties which have been introduced in the corporate law, effective as of 1 January 2021.

Agreement on the Performance of Office

An agreement on the performance of office is an agreement between a company and a member of its elected body. The new amendment provides that an agreement on the performance of office does not enter into effect, unless it has been approved by the company’s supreme body.

When approved, the agreement on the performance of office enters into effect either upon the execution date of the agreement, or upon the date of commencement of the member’s membership in the elected body, whichever is later.

Agreements on the performance of office are regulated by Section 59 et seq. of the Business Corporations Act.

Resignation

By the amendment, Section 58 of the Business Corporations Act has been changed as well, in respect of the effective date of resignation of a member from a company’s elected body.

Newly, the membership is terminated when the resignation is or should have been discussed by the body that elected the member of an elected body, unless provided by the memorandum of association that it is sufficient if the body of which the resigning member is a member discussed or should have discussed the resignation.

If the resigning member notifies of their resignation at a meeting of the respective body, the member’s membership will be terminated upon expiration of two months after the notification, unless the body approves a different date of termination of the membership.

More articles dedicated to the amendment of the Business Corporations Act are soon to follow. We will be also notifying of the deadlines for the required implementation of changes. If you are seeking advice about the impacts of the amendment on your company already now, we are at your service.