Legal status of the director
The term of office is determined by the statutory documents; as a rule, it does not exceed 5 years. While the powers are in effect, the director can exercise general management and carry out all actions related to the implementation of business activities. The manager is subject not only to labor legislation, but also to corporate law. At the same time, such a person is an ordinary employee who has an employment relationship with the enterprise, and on the other hand, he has powers that give him the right to manage the LLC. In addition to the rules of law, the activities of the manager are regulated by local documents:
- job description;
- charter;
- regulations on the director of the LLC;
- employment contract.
Position of the director in the state - main points
Contrary to the misconception, the director (or general director) of a business entity is an employee who carries out his labor functions on the basis of a concluded fixed-term or open-ended employment contract (in the manner specified in Article 275 of the Labor Code).
The performance of its functions is regulated not only at the federal, but also at the local level, that is, through the internal documentation of the legal entity (for example, the Charter, special regulations, job descriptions).
At the same time, the norms of corporate law are also applicable to him, that is, he has the right to represent the interests of the company or enterprise entrusted to him.
General rules for renewal of powers
Naturally, if we are talking about a fixed-term employment contract, then you will have to go through the procedure for extending the powers of the director, if after 5 years the company does not want to terminate relations with the director.
The most important thing that should not be forgotten is that it is necessary to take care of the legitimacy of the manager until the employment contract expires. Otherwise, problems may arise; regulatory authorities and banks may file legal claims against the LLC, and counterparties may go to court and challenge the concluded deal.
In addition, if you miss the deadline for extending the director’s powers, then you will have to act according to a different scheme, first fire the director, and then hire him again. And this is all the time and unnecessary paperwork.
You cannot extend powers during the absence of the manager from the workplace, for example, if he was on a business trip or sick.
How to extend the powers of a manager
Director of an enterprise is a position to which a person elected by the general meeting of founders or the sole participant of the company is appointed. Such a decision must be made on paper.
The manager is elected for a period determined in the Charter of the enterprise. After the specified period, the owners of the enterprise have an obligation to elect a new manager or extend the powers of the current one, which is fixed in the corresponding decision (or protocol).
IMPORTANT! It is safer to renew a contract with a general director working under a fixed-term contract through hiring and dismissal. Otherwise, problems with inspection authorities are possible (letters from Rostrud dated August 15, 2006 No. 1222-6-1, dated December 8, 2008 No. 2742-6-1).
Read about the nuances of voluntary removal of the powers of a manager in the article “Dismissal of the General Director at his own request.”
There is no liability in any legislative act for the fact that the director carried out his functions in managing a legal entity without extending his powers. Therefore, de facto, such a person can continue to sign contracts, make real estate transactions, and sign payment documents. In such situations, courts are of the opinion that until a new director is elected or the powers of the existing one are extended, the director has no restrictions on the exercise of management.
Holding a meeting of shareholders
To extend the powers of a director, it will be necessary to convene shareholders; perhaps the charter documents provide for a procedure for appointment and removal, or extension of legitimacy by a supervisory or other authorized body. Simply put, it is necessary to review the terms of the charter before convening the meeting.
If the LLC has several participants, the results of the agreements reached are recorded in the minutes. Such a document can be certified by a notary if such a procedure is provided for by the legal documents of the enterprise.
General requirements for the protocol:
- the date and place of compilation are indicated;
- a list of participants present indicating their shares;
- percentage of votes and whether there is a quorum;
- Document number;
- agenda (by the way, it is not recommended to write the “Miscellaneous” item; issues that are not specified in the agenda cannot be considered at the meeting);
- a statement of the essence of the meeting;
- summing up voting results;
- decision;
- signatures and full name with a transcript of the secretary and chairman of the meeting.
Protocol on renewal of director's powers, sample
Protocol No....
meetings of LLC owners... name...
Date of compilation, place
Present
Full name owning...% of the UV, equivalent in rubles....
Organizational and legal form, name, OKPO, owning ...% of the UV, equivalent in rubles ...
All members of the LLC were present at the meeting...
Quorum … %
Information about whether fees are considered eligible
Signatories of the protocol, full name
Agenda:
- On the extension of powers... position... LLC... name....
Listened... Full name...
Voted:
……
Decided
Extend powers... position... full name... for a period of... years.
Signatories... full name... signatures...
Minutes of the Supervisory Board
Protocol No....
Meetings of the supervisory board of LLC… name….
Date, city of compilation
Present
Chairman…. FULL NAME…
Members... FULL NAME ….
Agenda:
- On the extension of powers... position... LLC... name....
On 1 question, spoke... Full name ..., informing that ... date ... the powers of the general director end .... LLC...full name..., proposed to extend the powers.
Decided
Extend the powers of the director…. Full name... for a period of... years.
Entrust the signing of an additional agreement with the head of ... LLC ... to a member of the supervisory board ... Full name ...
Chairman of the Supervisory Board... Full name... signature
The director of an organization plays a key role in its functioning and development. And since this figure is the most significant for the company, the procedure for extending the powers of the director must be carried out on time and in accordance with the law. Article 40 of the Federal Law of 02/08/1998 No. 14-FZ “On Limited Liability Companies” establishes the need to indicate the term of office of the manager in the Charter of the enterprise. Thus, the frequency of renewal of powers directly depends on what is written in the document.
Please note that although indicating the term of office in the LNA is mandatory, the company will not be punished for its absence. However, the legality of the decisions made by such a director may be questioned by third parties, since the Charter does not comply with No. 14-FZ.
We invite you to familiarize yourself with: Sample arguments of the accused in a criminal case
The concepts of “term of employment contract” and “term of office of director” are often substituted. These two concepts relate to different areas of law. When we talk about the term of the contract, we are guided by Art. 59 of the Labor Code of the Russian Federation, which sets the maximum contract period for a director equal to 5 years. We also note that the Labor Code of the Russian Federation does not contain a ban on signing an open-ended contract with the manager.
Therefore, if an open-ended contract is concluded with the general director, the term of office under the Charter may be, for example, 3 years. During the renewal procedure, it is important not to miss the end date of powers, since without their extension, all decisions made by the boss, all documents and agreements signed by him will not have legal force.
The document is drawn up in free form and must contain the following data:
- Name of the organization.
- Registration data (TIN, KPP, OGRN).
- Legal address of the organization.
- Information about the founders (full name, passport details, place of registration).
- Distribution of shares between owners.
- Decision to extend the powers of the director.
- Information about the director (full name, passport details, place of registration).
IMPORTANT! If the director was retained for the next term, no changes are made to the Unified State Register of Legal Entities, but it is advisable to notify the Federal Tax Service in order to avoid misunderstandings.
Single owner of LLC
In cases where the company has only one shareholder, no minutes are drawn up, and the LLC participant makes a decision.
General requirements for compilation:
- As a rule, such a document is drawn up on the company’s letterhead;
- if the company’s owner is a legal entity, then it is necessary to indicate all identifying data of the enterprise;
- if the decision is made by an individual, then his passport data;
- the decision is not subject to mandatory certification by a notary, but ideally, it is better to go to a lawyer so that in the future the regulatory authorities do not have questions about the preparation of the document.
Decision to extend the powers of the director, sample:
Decision No....
Single participant of the LLC… name….
Date and place of compilation
I, full name..., passport details..., being a citizen...., passport details..., place of registration...., division code...., being a single participant of LLC... name...
DECIDED:
Extend powers... position... LLC... name... for a period... the period is indicated or written “..according to the terms determined by the Charter...”
Single participant of LLC ... name ...
Full name... signature...
company seal
Order for the enterprise
Now the HR department comes into play. It is necessary to create a general order for the enterprise to extend the powers of the director. It is not necessary that this document be drawn up by HR department specialists; it is drawn up by the employee responsible for maintaining administrative documentation. The requirements for the order are general and do not have any special features compared to other administrative documents. They are drawn up on A4 paper, not on the company’s letterhead. The order must contain the following mandatory details:
- LLC name;
- date and place of compilation;
- serial number;
- summary;
- the text part defines a clear date from which the manager’s powers are extended;
- position and full name of the document signatory.
Extension of powers of the director of an LLC, sample order:
Organizational and legal form of the enterprise…. Name…
Order No.___
Date and place of compilation
Short description
Based on the minutes of the general meeting of owners, I begin my official duties on... date...
Grounds: Decision or minutes of the meeting of LLC owners... name... No..... Date of.
Signatory position
Director of LLC…. name... signature and full name
Actions of the personnel department
If a fixed-term employment contract has been concluded with the manager, then, naturally, it should be extended based on the decision of the owner of the legal entity. The entire procedure must be completed before the employment contract expires. The text of the addendum will contain information about the extension of the contract, and not about the extension of authority.
Extension of powers of the director of an LLC, sample additional agreement to the employment contract:
Additional agreement
To …. agreement... contract... Name…
No.... date...
place of compilation, date
LLC ... name..., represented by the chairman of the supervisory board, full name..., acting on the basis of a decision of the supervisory board of LLC ... name... No.... date..., on the one hand,
And
Citizen... full name... ID details..., on the other hand,
have drawn up this additional agreement as follows.
Based on the protocol on the extension of the powers of the director No.... date
1. Extend the above agreement for a period of ... years, until ... date...
or
Paragraph …. agreements... date... No.... shall be stated as follows:
“Clause... The agreement is extended until....”
2. The remaining terms of the above-mentioned contract... agreement... not affected by these agreements remain unchanged.
Details of the parties
If it is entered into the work book that the contract is fixed-term, then changes will have to be made to the same document to extend the powers of the general director.
At the same time, there is another opinion, namely, a fixed-term employment contract cannot be extended. Courts that have adopted this point of view are of the opinion that the contract with the director should be terminated and a new one should be concluded. In this case, in addition to issuing orders for the dismissal and hiring of an official, you will have to make appropriate entries in the work book.
Definitely, a contract concluded on an indefinite basis does not require any changes.
At the same time, there is a third opinion. You can prepare in advance and “turn” a fixed-term contract into an open-ended one. More precisely, do not warn the director about the upcoming dismissal within the time frame stipulated by law and the contract. If this is not done and the official is not fired, then the contract becomes permanent. Although this scheme is recommended to be used only in extreme cases, that is, when the contract is concluded for less than 5 years.
Extension of labor relations
Expert opinion
Egorov Andrey Andreevich
Legal consultant with 10 years of experience. Specializes in family law. More than 3 years of experience in developing legal documentation.
An employment contract with the general director can be concluded for a certain period - as a rule, for the term of his powers in accordance with Art. 79 Labor Code of the Russian Federation.
The founder of the organization can still terminate the contract with the general director at any time on the basis of Art. 278 Labor Code of the Russian Federation.
However, there is a significant difference between terminating a fixed-term and an indefinite employment contract. The fixed-term contract is terminated without any additional payments.
In the event of termination of an open-ended employment contract at the initiative of the owner of the organization, the general director has the right to receive compensation in the amount determined by the employment contract. Article 279 of the Labor Code of the Russian Federation guarantees the minimum amount of such payment - 3 average monthly earnings.
To summarize what was written above, promptly reassigning the general director to the position and renewing the employment contract with him will be more profitable for the organization than letting things take their course.
Practice shows that in most cases, fixed-term employment contracts are concluded with managers of a business entity, valid for 60 months. Upon completion of this period, it may be necessary to extend the director's powers. How to correctly implement this procedure is written below.
Notification to tax authorities
Regarding the notification of the tax authorities, one point - if in the extract from the Unified State Register of Legal Entities there are no time restrictions on the term of office of the head, then no changes need to be made. If for some reason, when registering an enterprise or making changes to the registration data, restrictions on the duration of the management were added, then you will have to notify the tax authority about the extension of the powers of the director of the LLC. In this case, it is necessary to submit data to the registration authority within 3 days from the date of making the relevant decision.
conclusions
The CEO of an LLC is one of the main persons of the company. This is an executor who has the right to represent the interests of the organization without a power of attorney.
The election of the general director takes place at a meeting of the founders. It can be either one of them or a hired employee. The decision made at the meeting is documented - in the form of a protocol.
If the company has one founder, his written decision is sufficient to appoint a general director. He himself can become the first person of an LLC. There are no restrictions on this matter in labor legislation.
