The company’s articles and agreement between shareholders provide rights to shareholders and these rights are commonly related to shares that belong to shareholders. The company’s founding charter or said differently the articles of association can be considered as the constitution of the enterprise, codification of the rules that govern the organization (Glanville, 1982).Rights of shareholders can however differ substantially and the way they differ is coded in the articles of association or founding charter of companies. The concept of related parties refers to the arrangement of business between parties, which were engaged in a certain relationship prior to the transaction. As an example can serve a business transaction between a majority shareholder and between the corporation. There is a possible conflict of interest between the two parties and that despite the transaction possibly being legal. This conflict of interest might lead to benefits opposed to benefits of the shareholders and thus represents a potential breach of legal arrangements. A breach of this principle – that is, favouring relatives – Anglo-Saxon law is understood as an inappropriate distance (less than the length of an arm) maintained between a company and its related parties. It is important to note that in situation one person, including moral person, decides to place confidence in another person, in relation to a specific transaction or business, it is not necessarily to be coded in a written contractual relationship, as the expectations form part of a reality which can be considered from a legal point of view. The breach of law tort which is common and which was created to protect conveyed private information is the above mentioned breach of confidence.
A claim for such breach usually requires the confidential information to belong to the class of information that is of confidential nature or that was conveyed to the employee before to be confidential and which was disclosed and led to the detriment of claimants. Law tort in this respect is a civil wrong which is a cause of harm or unfair suffering of another person resulting in liability of those who perpetrated the act. The denomination of such persons is a tortfeasor. The cause of legal action of this type need not to be considered a crime, as it can be viewed by law as the act of negligence. The plaintiff of such must however be able to prove that the actions were a cause of harm and that these causes were legally recognizable. In civil law frameworks, unlike the mentioned common law framework, the equivalent concept is denominated as delict and might include all types of issues including economic, emotional and property based delicts.