The Higher Administrative Court recently requested that the Constitutional Court repeal Section 39(2) of the Trade Act, as it infringes fundamental rights guaranteed by the Constitution. Austrian legal practitioners are already eagerly awaiting this judgment, which is expected to be issued during 2018.
Parliament recently passed a new law on the registration of beneficial owners of Austrian legal entities. After obtaining the necessary approval of the Austrian federal states, the law is expected to enter into force on January 15 2018. In disclosing the relevant information on beneficial owners, the register aims to detect and prevent money laundering, especially with regard to complex corporate structures, holding companies or private foundations and trusts.
The typical way to invest in an Austrian company is by way of a capital increase. However, there are formalities with respect to limited liability companies (LLCs) – the most popular legal form in Austria – that sometimes make investing in LLCs unattractive or burdensome. To eliminate the concerns associated with these transactions, Austrian law provides a suitable, but widely unknown, alternative investment instrument: participation rights.
The Austrian Parliament recently passed an amendment to the law on limited liability companies (LLCs) aimed at simplifying the foundation of a special kind of LLC. The purpose of the changes – and the simplifications associated with them – have been hotly debated.
In a recent decision the Supreme Court held, in line with prior case law, that apparent authority requires the circumstances on which the assumption of authority is based to be induced by the principal, not by the representative. Although this is not new, the verdict has helped to clarify the boundaries of apparent authority. Certain key requirements must be met in order to establish apparent authority and thus allow the counterparty to rely on it.
The Court of Appeal judgment in Antow Holdings Limited v Best Nation Investments Limited continues the development of the law regarding BVI directors' duties following the Independent Asset Management appeal, which established – for the first time in the British Virgin Islands – clear guidance regarding the proper purpose test. The decision is arguably at the extreme end of the spectrum, with the court describing the motives of the Best Nation directors as self-serving.
A recent Court of Appeal ruling provided guidance on directors' powers after considering whether a fresh issuance of shares by directors which altered the balance of voting power between the shareholders was done for a proper purpose. The court held that directors should not issue shares in a manner that could affect the balance of power between groups of shareholders or create new majorities, irrespective of whether the old or new majority have a proprietary interest in the fund.
The ability to continue a foreign company as a BVI company or to continue a BVI company as a company under the laws of another jurisdiction quickly and seamlessly is just one example of the many flexible features of the Business Companies Act 2004. This feature is particularly useful in the context of corporate reorganisations, and counsel should be aware of the process and requirements for continuations and discontinuations.
As the world's leading incorporation vehicles, BVI companies are listed on exchanges and conduct business around the world and may therefore expect to be occasionally involved in activist campaigns or other challenges from shareholders. However, many investors and their advisers may be less familiar with BVI company law than their domestic legislation.
Draft legislation was recently published to introduce the limited liability partnership (LLP) as a new partnership vehicle in the Cayman Islands. The bill provides for the formation, registration and operation of an LLP as an entity with limited liability and legal personality separate from its partners. The bill also provides for the conversion of existing Cayman partnerships into LLPs and the continuation of foreign LLPs into the Cayman Islands.
The government recently published draft legislation which, when adopted, will require Cayman companies to maintain beneficial ownership registers and for the information in the registers to be made automatically available to the Cayman Islands competent authority through a centralised beneficial ownership platform. The legislation is now expected to pass through the usual approval process in the Legislative Assembly.
Law 20,954, which amends the Corporations Act in Law 18,046, was recently published in the Official Gazette. The amendment provides that custodians of shares in public companies that hold shares on behalf of other parties must provide the Securities and Insurance Commission with the identity of those parties. Banks that act as custodians must report this information to the Superintendence of Banks and Financial Institutions.
When an initial coin offering (ICO) is structured through a Cypriot company, directors' duties are highly relevant. The directors must approve the framework within which the ICO will be launched. While doing so, directors are legally required to protect the company's interests in line with their fiduciary duties. When directors also invest their own funds in an ICO, under Cypriot law, they must still maintain a conflict-free position.
Shareholder petitions of unfair prejudice have been compared to divorce petitions. Indeed, these shareholder disputes tend to carry the same level of acrimony, especially when courts are faced with the option of deciding the sale of one shareholder's shares to another. Fairness is at the heart of the courts' consideration when deciding cases of unfair prejudice and shareholder oppression.
Specific rules apply to the service of court and judicial documents and judgments issued by Cypriot or foreign courts in Cyprus. Among other things, companies must publish details of their registered offices with the Registrar of Companies upon incorporation and file a notification with the registrar within 14 days of any change of address. In addition, the private service of documents must be carried out by a Supreme Court-licensed private process server.
The concept of a 'golden share' was devised to maintain control of newly privatised companies as they adjust to the free market environment or to prevent takeover by overseas shareholders of private companies operating in fields of national interest. Cypriot company law is silent on the rights enshrined in golden shares. However, case law provides that golden shares represent a separate class of shares, which enable holders to exercise veto rights by having weighted voting rights on specific matters.
Shareholders of a Cyprus company have the right to request that the directors convene an extraordinary general meeting (EGM), and the directors are legally obliged to do so within a specified time. For the EGM to be legally valid, it must be made only by those who hold at least one-tenth of the company's paid-up share capital and have the right to vote in general meetings. Further, it must be signed and deposited at the company's registered office and must be called within 21 days of the request.