Journal of Research and Development in Comparative Law

Journal of Research and Development in Comparative Law

Obliging Commercial Company Directors to Declare and Disclose Interests in the Company's Future Transactions: A Comparative Study in United Kingdom and Iranian Law

Document Type : scientific research paper

Authors
Hamid Abhary 1
Seyedeh Tahereh Mosavikhatir 2
Omolbanin Ramzanzadeh Badeli 3
1 Professor, Department of Private Law, University of Mazandaran, babolsar, Iran
2 PhD student in Private Law, Faculty of Law & Political Sciences, University of mazandaran, babolsar, Iran
3 Assistant Professor, Department of Private Law, University of Mazandaran, babolsar, Iran
10.22034/law.2025.2041564.1459
Abstract
Directors of commercial companies are considered the company's trustees and are required to observe fiduciary duties in managing the company's affairs.Among the most important examples of observing the duty of trust, which is at the forefront of legal and preventive mechanisms to combat corruption, are the laws regarding the management of the directors' personal interests and their conflict with the interests of the company.At the international level, the first academic issues and discussions on conflict of interest date back to the 1970s, and numerous actions have been taken in this field so far.On the other hand, widespread legislation has been enacted in various countries regarding conflict of interest management.In Iranian law, the necessity of enacting laws in this field becomes clearer when we pay attention to the report on the ranking of countries based on the Public Corruption Perceptions Index published in 2023, according to which our country is ranked 149th out of 180 countries.
The Iranian legal system has also paid attention to management of conflict of interest, and hundreds of legal provisions have been enacted in this regard.
One of the issues through which the fiduciary duty is observed and which prevents conflict between personal interests of managers and those of the company is the requirement for managers to declare and disclose interests in the company's transactions in the immediate future.
In English law, this duty is stipulated in Article 177 of the Companies Act of 2006 under the title of General Duties of Directors, and in Iranian law, in Article 129 of the Amendment Bill of the Commercial Act approved in 2024.
Due to the importance of this issue, it will be examined comparatively in English law, as one of the advanced legal systems, and Iranian law.
Ultimately, it will be concluded that although this issue has been mentioned in the Amendment Bill of Iranian Commercial Act and also the Bill of Commercial Act drafted in 2024, there are numerous legal gaps and deficiencies in both the English and Iranian legal systems, which are vital to examine and eliminate.
Therefore, the need to draft and enact comprehensive laws related to this task and to eliminate gaps and deficiencies in the laws is strongly felt, especially given the Multi-nationalization of commercial companies and the increase in cross-border transactions.
Keywords
disclosure of interests
conflict of interests
fiduciary relationship
duty of loyalty
director
company

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