The executive body of the corporation, the board of directors, is all responsible for the internal management of the company, and it also represents the company with regard to third parties. The board has the power to carry out all legal acts on behalf of the corporation that are consistent with the objects of the company. In practice, the board of directors is just as important as the general assembly.
The board of directors of a corporation consists of minimum three natural people who are shareholders (TTK. m. 312/I). The election of the members of the board of directors is the inalienable responsibility/power of the general assembly.
Only a natural person is eligible to serve on the board of directors. If a legal entity or a business organization is a shareholder of the company, it is not eligible for election as a member of the board of directors (TTK. m. 312/II).
Each member of the board of directors must of necessity be a shareholder of the company, although any natural person may be elected to the board of directors, at the least before assuming office he must buy a share or at least hold one in a fiduciary capacity (TTK. m. 312/II).
The members of the board of directors are elected for a term of office of three years unless the articles of incorporation provide otherwise. Re-election is possible (TTK. m. 314). When the election is accepted, the members of the board of directors must be entered in the commercial register with their names, their domicile and their nationality (TTK. m. 300/b.9).
Those authorized to represent the corporation are required to deposit a signature with the commercial registry (TTK. m. 323).
The general meeting is entitled to remove members of the board of directors, at any time with disclosing its reasons. The dismissed director cannot claim compensation (TTK. m. 316/I).
Members of the board of directors exercise their duties primarily in the meeting of the board. The convening of board meetings and their conduct are generally handled by board president. A fixed time table for the meetings is not required. In practice the organizational regulations will regularly provide for meetings to provide for meetings to take place “as often as is required by business”. In addition, each member can request the immediate convening of a meeting by giving the reasons for his request for convening a meeting may take place informally. Resolutions taken by the board of directors at meetings to which not all board members have been invited are null and void.
The resolutions of the board of directors are adopted by a majority of votes cast. Each member has one vote (TTK. m. 330/I). The discussions and resolutions of the board of directors are recorded in minutes.