LEGAL REGIME OF RELATED-PARTY TRANSACTIONS IN COMPANY LAW AS MECHANISM FOR ELIMINATION OF CORPORATE CONFLICTS

O I Vygovskyy

Abstract


The article reveals the peculiarities of legal regime of related-party transactions in which insiders of a joint-stock company are interested, explores theoretical categories of conflict of interests and interest in corporate relationship as key determinants for qualification of certain group of transactions as related-party transactions, discovers specific features of legal regulation of such transactions within the Ukrainian legal environment related to the need for disclosure of information about available conflict of interests and specific procedure of ‘ratification’ of such transactions by the competent governing body of a company, as well as focuses on drawbacks of existing legislative rules and possible ways of their improvement. The author examines the consequences of non-compliance with the legal rules in respect of the related-party transactions and focuses its attention on the need for protection of interests of bona fide third parties, as well as considers the issue of filing an action against a related party by the joint-stock company itself and minority shareholders. The author of the article emphasizes that a non-disclosed conflict of interests and non-compliance with the internal corporate procedures of a joint-stock company should not affect the validity of rights of third persons – counterparties under related-party transactions.

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DOI: http://dx.doi.org/10.17721/apmv.2018.138.0.114-123

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