General Principles of Company Law for Transition Economies

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Abstract

The General Principles set forth below were developed by a working group organized by the OECD, including company law experts from France, Germany, Russia, and the United States.They are inteded both to guide drafters of company law in transition economies, and to set forth options for drafters to consider. Company law drafters may also wish to consult two model laws that are generally consistent with the principles set forth below: (1) a model law on joint stock companies prepared in English and Russian by Bernard Black and Anna Tarassova, reprinted in Bernard Black, Reinier Kraakman & Anna Tarassova, Guide to the Russian Law on Joint Stock Companies (1998); and (2) a draft model law on joint stock companies prepared in Russian by the ScientificConsulting-Center for Private Law of the Community of Independent States of the Former Soviet Union (1998).

FOREWORD In the context of the programme of the OECD's Centre for Co-operation with Non Member Economies (CCNM), a group of experts on company law was constituted to discuss and formulate a set of general principles of company law that can be of use to policy makers in the New Independent States of the former Soviet Union (NIS) as well as in other transition economies. These principles, presented in this publication, have four main aims: (1) to identify `best practices' or main alternative approaches towards a modern company law, adapted to the special needs of transition countries; (2) to articulate these principles in a fashion that allows them to be used as a basis for on-going and future legislative reform; (3) to assist the drafters of model/comparative legislation in the transition context; and (4) help regulators and especially judges in interpreting and implementing existing and future legislation. The CCNM is the focal point for the OECD's co-operation with transition economies in Central and Eastern European countries and the NIS. Its major responsibility is to design and manage a programme of policy dialogue which can take numerous forms, including conferences, seminars, expert meetings, and country-specific advice in which policy questions can be explored and draft legislation reviewed. As part of its ongoing programme of assistance, the OECD, in co-operation with the Turkish International Co-operation Agency and the German government, has created the Centre for Private Sector Development in Istanbul. This publication and related meetings were realised in the context of this Centre.

In September 1996 a small team of experts was constituted to draft the principles. The group included: Dr. Gainan Avilov, Senior Research Associate, Institute for Legislative and Comparative Law under the Government of the Russian Federation; Professor Bernard Black, Columbia University School of Law, U.S.A. (general rapporteur); Professor Dominique Carreau, University of Paris I; Dr. Oksana M. Kozyr, Deputy Head of Department, Research Centre for Private Law under the President of the Russian Federation; Mr. Stilpon Nestor, Head of the Privatisation and Enterprise Reform Unit at the OECD; and Dr. Sarah Reynolds, Fellow, Davis Centre for Russian Studies, Harvard University, U.S.A. The draft set of principles elaborated by the drafting team was submitted for discussion to a high-level experts group which met in Istanbul on 9-11 December 1996. Participants included senior representatives and company law experts from NIS countries and OECD member countries (see List of Participants). IMAGE FORMULA12

Conclusions drawn at this meeting, following the presentation of the draft text and its extensive discussion by the experts, form the basis for the general principles published herein. These were finalised and edited in English by an OECD Secretariat team, which included Stilpon Nestor, Frederic Wehrle, and Sebastian Molineus. In view of the aim of the general principles, it was decided to publish them simultaneously in Russian. …