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Transforming Georgia’s regulations on Shareholders’ right to interim dividend Confronting the European Company Law

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  • Tokhadze Ana

    (Faculty of Law, Ivane Javakhishvili Tbilisi State University, Chavchavadze Ave. 3, Tbilisi 0179, Georgia)

Abstract

The article provides a critical legal analysis of Georgia’s regulations on the interim dividend payment and highlights the necessity of proper amendments to comply with European company law. Since having an EU-Georgia Association Agreement signed, the dynamic process of Europeanization has put various legislative changes on the agenda, which also regard shareholders’ proprietary rights. This article briefly gives a novel insight into the distribution of interim dividends from a comparative point of view. It suggests the possibly scrutinized coverage of the legal preconditions along with liability consequences for the interim dividend declaration from the perspective of both shareholders and joint stock companies in Georgia. The article emphasizes the structure of the corporation, which naturally bedrocks the potential conflict of interests between the shareholders and creditors. The topic also endorses questioning Georgia’s rules on capital maintenance in relation to the interim dividend distribution. Hence, the study reveals prevailing regulatory lapses and makes pertinent recommendations on the alignment of the financial interests of those mentioned. Last but not least, the article exposes how directors on the credible basis of their fiduciary duties are assigned to divert assets of the corporation since their rationality in decision-making is expected to meet the best interests of the company.

Suggested Citation

  • Tokhadze Ana, 2020. "Transforming Georgia’s regulations on Shareholders’ right to interim dividend Confronting the European Company Law," TalTech Journal of European Studies, Sciendo, vol. 10(2), pages 57-74, September.
    • Handle: RePEc:vrs:bjeust:v:10:y:2020:i:2:p:57-74:n:5
    DOI: 10.1515/bjes-2020-0015
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    References listed on IDEAS

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    1. Kraakman, Reinier & Armour, John & Davies, Paul & Enriques, Luca & Hansmann, Henry & Hertig, Gerard & Hopt, Klaus & Kanda, Hideki & Pargendler, Mariana & Ringe, Wolf-Georg & Rock, Edward, 2017. "The Anatomy of Corporate Law: A Comparative and Functional Approach," OUP Catalogue, Oxford University Press, edition 3, number 9780198724315.
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