Transactions with Administrators and Controlling Shareholders

Scenario for Implementing Dynamic Burden of Proof Rules

Abstract

This paperwork analyses the necessity of having a dynamic burden of proof regime in the Ecuadorian Corporate Law. That, applied to related party transactions made by the controlling shareholders to harm the company and the minority shareholders.

Thus, the dynamic burden of proof and agency problems doctrines are analysed to clarify how having a dynamic burden of proof can facilitate the judicial review of the abusive transactions. Similarly, this paperwork analyses how the most developed systems benefit from dynamic burden of proof rules and standards of revision to deal with the expropriatory related party transactions.

Finally, this work analyses the mechanisms provided in our legal system, so it is verified that because of its ineffectiveness, dynamic burden of proof rules should be provided in our system. That, to ease the litigation initiated by the minority shareholders and give them more protection within the ex-post control.