Dismissal of the CEO by decision of the founder: step by step instructions

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The dismissal of any employee of any organization must be carried out in accordance with the norms of the Labor Code of the Russian Federation. The CEO is no exception to the rule. When the CEO is dismissed by decision of the founder, a special procedure for paperwork is provided.

Reasons for dismissal of the head

He can be fired on the same grounds as other employees of the company. At the same time, the CEO can be forcedly dismissed only by the founder.

Let's consider what causes the dismissal of the CEO by decision of the founder. In the following cases:

1. As a result of his misconduct, the organization suffered damage. The damage caused is confirmed by relevant documentation, including accounting. The trial ends with the drawing up of an act.
2. Drinking in the workplace. This offense must be recorded by at least two witnesses and a medical examination must be carried out. As in the caseviolation of traffic rules, the person being checked may refuse the latter, about which a corresponding note is made in the act.
3. In case of disclosure of trade secrets. The fact of disclosure must be recorded, written explanations are taken from the general director. In this case, the guilty person may also refuse to give explanations, then an act is drawn up with the invitation of two eyewitnesses to this disclosure.
4. In case of cancellation of a fixed-term contract due to reaching the end date specified in it, and the founder's lack of desire to renew it.
5. This agreement may be terminated without explanation. In this case, the dismissed person must be informed of the unpleasant consequences for him 30 days before the moment of dismissal.
6. Due to the liquidation of the economic entity, which was headed by the dismissed CEO. Not later than two months before the liquidation, he is provided with a notification. After the selection of the liquidator or the liquidation commission, the powers of the general director are immediately terminated.
7. In bankruptcy. A petition is submitted to the arbitration to remove the head from his position. If the court makes a positive decision, the powers of the general director are transferred to the interim manager.
8. When changing the founder. A package of documents on the change of founders is being prepared. Three months after the transition of the company from one founder to another, the CEO is notified of the removal from office.
9. Resignation of the CEO at his own request.
10. His resignation by agreement of the parties.
11. And also in otherscases stipulated in the Labor Code of the Russian Federation and prescribed in the employment contract.

Employment contract with the manager

The charter of the organization may determine how the appointment of the head of an economic entity takes place. It is carried out, as a rule, by one of the founders of the legal entity, or by another individual authorized by the founders.

If the general director is appointed under an agreement with another legal entity or individual entrepreneur, or the sole founder acts as the head, then the rules of Ch. 43 of the code above do not apply.

The employment contract stipulates the issues of his rights and obligations, as well as the obligations of the employer. This contract can be fixed-term or indefinite.

Sample employment contract

There is no legally approved standard form of this agreement with the head of an economic entity. Consider a sample employment contract with the CEO of an LLC by chapter.

The preamble to the contract contains data on the persons concluding it, including the legal and physical persons acting on their behalf. Passport data is indicated here.

The first chapter specifies the subject of the contract: working conditions, the exact title of the position, the address of the main place of work.

The second chapter lists the rights and obligations of the parties. As a rule, they are transferred from the Charter of the LLC to which he is appointed head. Here the rights andobligations of the founder, who is the employer, which should not contradict the requirements of the Labor Code of the Russian Federation, since otherwise the former will be recognized as null and void. The employer must provide for the creation of an appropriate workplace for the general director, where his work will be safe, regular payment of his salary, certain types of incentives may be provided for the director if he successfully fulfills his duties.

The third chapter provides for the responsibility of the appointed leader. There may be cases of dismissal of the CEO by decision of the founder, cases of compensation for damage caused by his actions or inactions.

The fourth chapter establishes the duration of the contract, which can be unlimited.

The fifth chapter provides for cases of termination of this agreement with the head of an economic entity. Here, those cases that were described above are indicated, and other cases that do not contradict labor legislation can also be given.

The sixth chapter spells out the issues of remuneration and social services for the general director. Here the salary, the regularity of bonuses, the duration of the working week and the working day, the duration of the vacation, guarantees in accordance with the legislation of the country are indicated.

The seventh chapter contains the final provisions. It stipulates the procedure for resolving disputes, the possibility of applying additional agreements to the contract.

At the end of the contract aresignatures of the founder and the appointed general director. The signature of the first is certified by a seal, if any.

This sample employment contract with the general director of an LLC is not legally defined as mandatory. The chapters, except for the preamble, the subject matter of the treaty and the final clauses, may appear in a different order. They may have other names, the rights and obligations of the parties may be divided into different chapters.

As already noted, the employment contract with the CEO can be fixed-term and indefinite. In the first case, when it expires, a new document is signed if there are no reasons for the dismissal of the head of the legal entity.

Following termination procedures

The dismissal of the CEO for various reasons, except for his own free will, is carried out in several stages.

First, a meeting of commissioners is assembled, which may have various names in accordance with the Charter of the organization. It issues its final verdict on the dismissal of the head of the economic entity, information about which is recorded in the minutes of the meeting of this meeting. Based on the last document, an order is being prepared to dismiss the general director. It indicates the detailed reasons for the dismissal of the head from his position.

Like all employees, the former manager gets acquainted with the order, signs it and receives the compensation payments that he is en titled to by law and contract. Within three days fromfrom the moment of dismissal of the ex-head, it is necessary to submit information to the Federal Tax Service to amend the Unified State Register of Legal Entities. The new director of the organization does not have the right to sign until the transfer of information about him to the Unified State Register of Legal Entities.

A few days before the dismissal, the transfer of cases by the old leader begins, and their acceptance by the new one.

In case of violation of labor laws upon dismissal, the ex-head can go to court and restore his rights.

In addition to the order, there must be a decision of the owner of the economic entity.

Dismissal of the CEO by decision of the founder by order cannot take place if the first one is on sick leave or vacation.

Voluntary cases of dismissal

If an agreement is reached between the parties, the dismissal is carried out according to the following mandatory steps:

1. The head of the organization submits an application addressed to the founder or other authorized person with a request for dismissal under these circumstances.
2. A meeting of commissioners is being held to discuss the issue of dismissal and the issue of the agreement itself. As a result of this discussion, an agreement is born, with which the dismissed person is familiarized against signature.
3. The dismissal order is signed. The dismissal record is entered in the work book of the ex-head.
4. The FSN is notified within three days.
5. A work book is issued to the dismissed person and material compensation is provided.

Dismissal of the CEO at his own request onCompared with the dismissal discussed above, it is distinguished by the absence of an agreement. Instead, at a meeting of authorized persons, a protocol is written indicating the decisions taken by the founders.

Dismissal of the head of a legal entity by the sole founder

How to fire the CEO if the business entity has a single founder? In most cases, the head of the economic entity himself acts in his role. In this case, the dismissal procedure is greatly simplified. The above Code states that the sole founder may dismiss himself at any time from his position. If he is not the general director, but dismisses the latter, then instead of holding a meeting of authorized persons and drawing up a protocol, he prepares a decision of the sole founder, and otherwise, the dismissal procedure for the head of an economic entity is the same as described above.

It follows that the dismissal of the CEO by the decision of a single founder is a more simplified procedure compared to the situation when there are several founders.

Payments to laid-off workers

Payments upon dismissal of the CEO by decision of the founder are determined in the contract and at the legislative level.

In case of illegal actions that caused damage to the organization headed by the person at the time of his being on the leadingpositions, payments to the ex-director are not made.

The Labor Code contains a minimum level of payments upon dismissal of the head of an economic entity by decision of the founder, which cannot be less than three times the average monthly salary. Such an amount may be paid, unless otherwise specified in the text of the employment contract. Ex-heads of state, unitary and state-owned enterprises, corporations and funds should not apply for more.

Amount of compensation payments

Compensation payments depend on the amount of salary, length of service in the position of the head, and also on how close the moment of dismissal is to the date of termination of the contract with the head.

Incentive payments are taken into account when calculating compensation, but maternity leave, maternity care are not taken into account. Compensation is calculated based on the average daily earnings, on the basis of which the average monthly earnings are calculated by finding the product of the average daily wage and the number of working days for the last year and multiplying the result by 3.

Compensation must be paid on the day the manager leaves. If he is absent for a good reason, he can apply and the payment will be made the next business day. If the ex-manager was not on vacation, compensation for non-vacation leave is added to the total payment.

In the absence of claims on his part and challenging the dismissal in court on thisthe procedure for the dismissal of the general director by decision of the founder ends. If it is violated by the founders, the latter may be held accountable.

Is there a responsibility of the former leader?

The dismissal of the head of an economic entity from his position does not release him from liability in case of causing damage to the organization he headed at one time. He, depending on the misconduct and crimes committed, can be brought to both criminal and administrative liability.

The responsibility of the former leader must be proven in court. If the latter makes a decision on the guilt of the former CEO, he will be given the appropriate punishment.

Judicial challenge of dismissal

In most cases, the founder is not eager to pay compensation to the dismissed hired general director, which is due to him under the legislation of the Russian Federation. Therefore, dismissal in most cases occurs due to an unlawful decision of the head, which caused damage to the organization, or due to the fact that the former head of his labor duties were grossly violated, while what is included in the concept of "gross violation" is not explained.

Therefore, the ex-leader retains the right to judicial protection. To do this, it is better to contact labor dispute lawyers.

In closing

The dismissal of the CEO by decision of the founder is done to some extent in the same way as any other employee of the organization. At the same time, it is necessary to take into accountthe fact that the head is the sole executive body of the economic entity, in connection with which the dismissal procedure becomes more complicated compared to that in relation to any other employee. The head acts on behalf of the business entity, but all his actions are accountable to the founders. Therefore, in case of existing grounds, the founder has the right to dismiss the head of the legal entity.