Without obtaining permission from the general assembly the board member cannot conduct any transaction with the company directly or indirectly. If such permission is not obtained, the company may claim that the concerned transaction is invalid. The counter party may not make such a claim.
Board members who are not shareholders and their relatives who are not shareholders, and a person of his/her lineal consanguinity or his/her spouse or one of his/her blood and in-law relatives up to third degree, including the third degree cannot borrow cash from the company. The company cannot (a) take over their debts, (b) issue guarantee, warranty and collateral for these persons and (c) assume their liability. In cases to the contrary, creditors of the company may directly pursue these persons for the company debts to the amounts for which the company is liable for.
