Directors under the new rules: representation, conflicts and rules for performing office

Private law recodification affects more than contracts and limitation. The draft Civil Code, approved by the government on 6 May 2026 and advanced to second reading by Parliament on 9 June 2026, with proposed effect from 1 July 2027, also rewrites the foundations of how a legal entity acts and its bodies operate. These will be default rules, applicable wherever special legislation does not provide otherwise.

Companies will act through representation

The conceptual change is that a legal entity’s expression of will moves from direct action to indirect action through representation, including determination of the type of representation applicable to its statutory body. According to the recodification commission’s materials, this matters particularly for attributing liability to the legal entity. The legal basis of corporate bodies’ status and standards for performing their functions are also recast. In practice, this requires reviewing signing rules and the method of acting recorded in company documents.

Express conflict-of-interest rules

The draft expressly regulates conflicts of interest when a member of a legal entity’s body acts, independently of general representation rules, and the consequences of breach. Answers have previously been assembled from fragments of case law. Companies will now have another reason to set internal rules on disclosure and approval of conflicted transactions. The draft also fills the current gap concerning defects in decisions of corporate bodies, addressing flawed general meeting and other corporate decisions.

Employment-law rules without an employment relationship

For directors, the precise boundary drawn by the draft is important: under § 224(3) of parliamentary print 1312, an agreement governing the performance of office may provide for the appropriate application of employment-law rules. The draft expressly states, however, that this does not create an employment relationship. It also preserves mandatory rules on a body member’s liability, remuneration and termination of office. This is therefore an option to regulate the conditions for performing office by agreement, not an automatic conversion of a director into an employee or a guarantee of any particular social-contributions regime. Existing agreements governing the performance of office and management employment contracts must be assessed according to their actual content.

What to do before it takes effect

Parliament must still consider the draft and the wording may change. However, it is worth mapping service agreements, signing rules and conflict policies now, so implementation becomes a routine update rather than an emergency. See our preparation for the new Civil Code or general meeting and corporate decision services. We can review your company’s arrangements in advance.