Section 1168.- The directors must in their conduct of business apply the diligence of a careful business man.

                  In particular they are jointly responsible :

                  (1) For the payment of shares by the shareholders being actually made ;

                  (2) For the existence and regular keeping of books and documents prescribed by law ;

                  (3) For the proper distribution of the dividend or interest as prescribed by law ;

                  (4) For the proper enforcement of the resolutions of the general meetings.

A director must not, without the consent of a general meeting of shareholders, undertake commercial transactions of the same nature as and competing with that of the company, either on his own account or that of a third person, nor may he be a partner with unlimited liability in another commercial concern carrying a business of the same nature as and competing with that of the company.

The foregoing provisions shall be applied also to persons representing the directors.

 

Section 1169.- Claims against the directors for compensation for injury caused by them to the company may be entered by the company or, in case of the company refuses to act, by any of the shareholders.

Such claims may also be enforced by the creditors of the company in so far as their claims against the company remain unsatisfied.

 

Section 1170.- When the acts of a director have been approved by a general meeting, such director is no longer liable for the said acts to the shareholders who have approved them, or to the company.

Shareholders, who did not approve of such acts, cannot enter their action later than six months after the date of the general meeting in which such acts were approved.

 

3. GENERAL MEETINGS

 

Section 1171.- A general meeting of shareholders shall be held within six months after the registration, and shall subsequently be held once at least in every twelve months. Such meeting is called an ordinary meeting.

All other general meetings are called extraordinary meetings.

 

Section 1172.- The directors may summon extraordinary meetings whenever they think fit.

They must without delay summon each meeting when the company has lost half the amount of its capital, in order to inform the shareholders of such loss.

 

Section 1173.- Extraordinary meetings must be summoned if a requisition to that effect is made in writing by shareholders holding not less than one-fifth of the shares of the company. The requisition must specify the object for which the meeting is required to be summoned.