no profit rule of the director of companies in the laws of iran and England

Document Type : Original Article

Author

Assistant Professor of Private Law, Law Department, University of Guilan, Rasht, Iran.

Abstract

The management of the company can lead to a situation of conflict of interest, in the sense that the director may have to choose between his personal interests and the interests of the company. Considering that due to human nature, he most likely prefers his personal interests over the interests of the company, so a solution should be thought of. In the law of England , one of the rules governing the relationship between the director and the company is the no profit rule. According to this rule, the director cannot obtain personal benefit from the management of the company unless it is approved. In the law of this country, the main basis of this rule is the fiduciary relationship of the director with the company, and based on this, the issues that are raised in relation to it, such as the territory or its sanction are answered. Based on fiduciary relationship, he must use the your powers in line with the interests of the company and cannot deviate from what the law or the partners have considered for him. In the law of iran, the fiduciary relationship is a suitable basis for establishing the rule and finding the answer to the issues related to it. there are also important differences in some respects between the two legal systems.

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History

  • Receive Date: 17 June 2025
  • Revise Date: 20 September 2025
  • Accept Date: 13 October 2025

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