Legal News (August 2023): The new definition of a businessman in civil law

Who is obliged to compensate the former tenant for the acquisition of the customer base and what are the requirements of the statute regarding the funds to which part of the joint-stock company’s profits are allocated – all these issues were dealt with by the Supreme Court. You can read more about these rulings, as well as other case law, in the following lines of legal news.

• In a previous ruling, Case No. 33 Qaddo 2919/2022, the Supreme Court dealt with a case The new concept of the businessman in civil law And its impact on the evaluation of the validity of the legal act in the absence of a license from the common law to practice the project. The new concept of entrepreneur has abandoned the previous requirement under which a person who has a license to conduct business is considered to be an entrepreneur. Under the general definition, an entrepreneur is defined by the actual activity and not by whether or not the person has general authorization to run the business. If a person engages in an activity that bears the characteristics of entrepreneurship, he is considered a businessman even if he practices this activity without a license. This concept is related to the provision of Article 5 (2) of the Civil Code, which prohibits the lack of public authorization from being linked to the conclusion that the legal act is void, unless the party concerned maintains the invalidity. Hence, the Supreme Court held that the decision of the Court of Appeal, according to which a loan granted by a person who does not have the proper authorization to grant consumer credit is not consumer credit, and therefore the provisions of the Consumer Credit Act do not apply to it, is contrary to this provision. The nature or validity of a legal act against the will of the party concerned cannot be questioned simply because the act was done by a person who was not authorized or prohibited to act.
• In its latest ruling, Case No. 21 Cdo 445/2023, the Supreme Court considered whether an employee whose employer terminated their employment relationship for cause He is entitled to receive compensation for the period during which the employee receives an early retirement pension at his request. The Supreme Court has ruled that if an employee decides to apply for and receives an early retirement pension, he/she may not engage in paid employment to the extent that it results in participation in the insurance scheme. The law does not allow paid employment to coincide with the payment of an early retirement pension. In such a situation, it is concluded that the employee’s source of income should not be the salary from the previous job, but the pension granted. Therefore, the employee is not entitled to the wage compensation under Article 69 (1) of the Labor Law from the date of granting the pension. The reasons for which the employee decided to apply for an early retirement pension are irrelevant.
• In a previous ruling, the Supreme Court dealt with The question of the elements to be included in the articles of association of a joint-stock company creates funds from which a part of the profits are compulsorily paid. Referring to its previous decision (R. 9/2020), the Supreme Court concluded that if the joint stock company intends to create in its articles of association special purpose funds from profits (to which profits are allocated compulsorily), the articles of association must be at least regulated. The amount to be allocated to these funds or the amount of profits to be allocated to them, as well as the purpose for which the funds will be used (eg whether the funds can be used to make payments to persons other than the shareholders of the company). If the Articles of Association stipulates the allocation of profits to funds with special purposes, and does not specify the number of profits to be allocated to the funds, then this provision shall not be binding on the General Assembly when distributing profits. Hence, the decision of the General Assembly is not defective if the profits are not allocated to these funds. Conversely, if the general assembly allocates profit to these funds, this is not an important reason for not distributing the profit to the shareholders.
• In its ruling, the Supreme Court dealt with Case No. 27 KDO 2048/2021 Issues related to the legal regulation of mandatory acquisition bids, In particular by specifying the applicable period for fixing the share price in the mandatory takeover offer. Jurisprudence has established the principle that all (minority) shareholders who hold shares of the same type and who are affected by the controlling shareholder’s obligation to make a public offer to enter into a contract to buy their shares should be treated equally. For this reason, the Supreme Court has concluded that the provisions of Section 183C(3) of the Commercial Code should be interpreted to mean that the last day of the six-month period for determining the weighted average is not the day preceding the day on which the controlling shareholder acquires a controlling interest in the target company, but The day on which the controlling shareholder fulfilled his obligation to make a public offer to enter into the contract. If the controlling shareholder fails to fulfill his obligations within the statutory period, the last day of the six-month period shall coincide with the last day of the sixty-day period referred to in Article 183B(1) of the Commercial Code.
• The Supreme Court, in its decision in Case No. 26 CDO 3644/2022, dealt with an issue Who can claim compensation from the former tenant of the commercial premises for the transfer of the customer base. Article 2315 of the Civil Code, which regulates this issue, does not explicitly specify who is obliged to pay compensation. Systematically, this provision is included in the legal regulation of the tenancy relationship, that is, a relationship based on an obligation arising from a bilateral legal act, specifically the lease contract. In principle, the lease contract is binding only on the parties to the contract and does not act towards other persons except in cases stipulated by law. Therefore, if it is not expressly stated that the person to whom the lessor has transferred the same commercial premises for use after the expiry of the lease agreement with the expiring tenant (i.e. the new tenant) is (may be) also obligated to pay compensation for the advantage gained through the acquisition of the customer base of the tenant who terminated, it is reasonable to assume that the legal act of the contracting parties cannot, in principle, give rise to an obligation to perform in favor of another (third) party without their consent. Thus, the Supreme Court concluded that only the (former) lessor could be sued in a dispute over payment of compensation for the takeover of the customer base (Section CC 2315). This compensation cannot be claimed from the new tenant. This applies regardless of whether the (previous) lessor or the new lessee is the beneficiary of the takeover.