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Business judgement rule in Czech Corporations Act

Author

Listed:
  • Jaromír Kožiak

    (Department of Commercial Law, Masaryk University in Brno, Czech Republic)

Abstract

Czech private law is currently undergoing a thorough transformation. This inclundes adoption of a brand new Corporations Act, which is to supersede the current Commercial Code. The new legislation introduces several new rules governing liability of company executive officers. One of these is business judgment rule. It should provide company executive officers with a certain level of protection against litigantion – if specific terms are met, it is presumed, that they carried out their responsibilities with proper care. I intend to demonstrate, that the czech business judgment rule is flawed, despite the fact that it draws from foreign examples and that this regulation, although seemingly groundbreaking, in fact changes nothing in examination of the decisions of the company executive officers in Czech Republic. The main goal of this article is therefore to analyze and criticize the business judgment rule in the new Czech legislation and to compare it to notable foreign legal systems. The methods used are inductive and deductive reasoning, author‘s own analysis of legal text, comparative method and compilation of available resources relating to the topic of the article.

Suggested Citation

  • Jaromír Kožiak, 2013. "Business judgement rule in Czech Corporations Act," Juridical Tribune - Review of Comparative and International Law, Bucharest Academy of Economic Studies, vol. 3(2), pages 126-135, December.
    • Handle: RePEc:asr:journl:v:3:y:2013:i:2:p:126-135
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    More about this item

    Keywords

    Business judgment; Company executive oficer; corporate body; company; corporation; Corporate law.;
    All these keywords.

    JEL classification:

    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

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