| Abstract [eng] |
The purpose of this work is to identify and give interpretation of main fiduciary duties of company directors’ and co-partners in economic partnership. Civil courts of Lithuania use fiduciary relationships in company law context, but avoid recognizing fiduciary relationships between co-partners in economic partnership. Despite recognition of fiduciary relationships in company context courts often make mistakes in interpreting fiduciary duties. This work seeks to clarify the meaning and nature of fiduciary relationships, identify differences and similarities of fiduciary duties of company director and co-partners. Part I deals with the nature and the meaning of fiduciary relationships and the task of fiduciary duties. It argues for a more precise definition of fiduciary relationships and more limited application of fiduciary duties. Limited possibility to effectively monitor performance of fiduciary provides both the opportunity and the means to act self-interested. Because beneficiary cannot effectively oversee day-to-day performance, fiduciary duties ensure at least that the fiduciaries will be loyal to the beneficiaries’ interests. Part II deals with fiduciary duties of company director. It states that director has fiduciary duties to company and not to individual shareholders. When a company is insolvent, director also has to consider the interests of company creditors. It states that the Supreme Court of Lithuania uses terminology of loyalty to mean something quite different than fiduciary duty of loyalty which requires to operate on the basis of self-denial and has the main elements: non profit and no conflict rules. It also rejects the idea that duties of care and good faith are in fiduciary nature. Part III states that general partners in general partnership are not fiduciaries, as such, because partners do not delegate open-ended management control to co-partners while making decisions collectively. In limited partnership partners have fiduciary duties to limited partnership acting, as agents, and acting, as a body, because interests of limited partners must be protected. It concludes that the duties of general partners are quite the same as duties of company director. |
