Organizational Objections of Commercial Companies Against Third Parties

Recognition of separate legal personality for company and limited liability mechanism for shareholders leads to creation of an organizational structure for company. This feature imposes commercial risks such as organizational objection to third parties. These objections refer to breach of all mandatory rules of corporate law and contractual rules such as corporate charter. Inter-organizational sanction of such breach of corporate law rules is the annulment of such actions and decisions. But this nullity is not reliable against third parties because of essential differences between commercial law and civil law regarding creation and transfer of right; and commercial law’s emphasis on apparent creation and transfer of rights.
This proves a rule as “impossibility of invoking organizational objections of company against third parties” which leads to “uninvokabilty” of “organizational objection of company” against “bona fide third parties”.