UNCITRAL legislative guide on insolvency law, part four

Directors' obligations in the period approaching insolvency

image of UNCITRAL legislative guide on insolvency law, part four
This book focuses on the obligations regarding management of an enterprise when it faces imminent insolvency or insolvency becomes unavoidable. The aim of imposing such obligations, which become enforceable once insolvency proceedings commence, is to protect the legitimate interests of creditors and other stakeholders and encourage timely action to address financial distress and minimize its effects. This publication addresses the key elements of provisions imposing such obligations, as well as the nature of the obligations, the time at which the obligations should arise, the persons to whom the obligations would attach, liability for breach of the obligations and enforcement of those obligations, specifically applicable defences, remedies, the persons who may bring an action to enforce the obligations and how those actions might be funded.




Corporate governance frameworks regulate a set of relationships between a company’s management, its board, its shareholders and other stakeholders and provide not only the structure through which the objectives of the company are established and attained, but also the standards against which performance can be monitored. Good corporate governance should provide incentives for the board and management to pursue objectives that are in the interests of the company and its shareholders, as well as fostering the confidence necessary for promoting business investment and development. Much has been done at the international level to develop widely adopted principles of corporate governance that include the obligations of those persons responsible for making decisions concerning the management of an enterprise (in this part referred to as “directors”) when it is solvent.


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