The sole executive body of a legal entity: functions and powers

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

The charter of an LLC, a sample of which is considered typical for all organizations, contains key provisions relating to the activities of the company. It establishes the procedure for the operation of the enterprise, describes the main activities, formulates the rights and obligations of participants. The same document establishes the legal status of the sole executive body of a legal entity. Consider further what it is.

General information

The sole executive body of a legal entity is, in fact, a special position in a company occupied by a citizen. He can acquire and exercise the rights, bear the responsibilities of the organization. In practice, this activity is transferred to the head. The charter of an LLC, a sample of which is presented in the article, determines the scope of its competence and other issues.

Regulatory framework

Legal regulation of the activities of the head of the company is carried out by:

1. FZ "On Limited Liability Companies".
2. Labor Code of the Russian Federation.
3. FZ "On Joint Stock Companies".
4. Civil Code of the Russian Federation.
5. FZ "On state registration of individual entrepreneurs and legal entities".
6. Law No. 161 "On Municipal and State Unitary Enterprises".

Civil Code

The Civil Code establishes that any organization receives its rights and bears obligations through its own bodies. They act on the basis of the provisions of the law, other regulations, including local ones. The latter, in particular, include the constituent documentation. It determines the procedure for the election or appointment of the company's management. This provision is enshrined in Art. 53 GK.

Specific leadership position

Any legal entity must have its own executive body. It can be one subject or a group of citizens. The competence of management includes operational activities, control and organization of the company. It is he who receives the rights and bears the corresponding obligations of the company. The Federal Law "On Limited Liability Companies" defines special rules for the management apparatus. First of all, they relate to the procedure for managing the activities of the company. In Art. 32, paragraph 4 of the said Federal Law, it is determined that the management of the current work of the enterprise is carried out by the sole executive body of the legal entity independently or jointly with the collegial structure. All entities included in the company's management apparatus are accountable to the general meeting and the supervisory board. One of them elects the management of the enterprise. The founder, who is also the CEO, signs an agreement with the organization. From hername is signed by the subject presiding at the general meeting where the election took place. The charter may transfer this right to the supervisory board. An entity that is not a member of the organization can also act as a leader.

Director: authority

The head of the firm carries out activities on its behalf. It does not require a power of attorney. In accordance with the law, the following powers of the sole executive body of a legal entity are distinguished:

1. Representing the interests of the company, carrying out activities on its behalf, making transactions.
2. Issuing orders for the admission of employees to the state, their dismissal and transfer, the application of incentive measures and disciplinary sanctions against them.
3. Issuance of a power of attorney giving the right of representation on behalf of the company, including with the possibility of substitution.
4. Other powers not assigned by law or local acts of the company to the competence of the supervisory board, the general meeting and the collegial management structure of the enterprise.

Specific election

The procedure in accordance with which the sole executive body of a legal entity is created is fixed by a local act of the company. The election of the head, as well as his early removal from office, is carried out by the general meeting. His competence also includes the transfer of powers of the director to the manager, the approval of the latter and the conclusion of an agreement with him. Decisions are made by majorityvotes. A different number may be determined by the charter. By the same document, the solution of the above issues may be included in the competence of the supervisory board.

Replacement of the head by the manager

The functions of the sole executive body of a legal entity may be transferred to another organization or individual entrepreneur. This possibility is enshrined in Art. 42 of the Federal Law No. 14. Until July 1, 2009, there was a rule that the powers of the executive body of the company could be transferred to the manager, if this is expressly provided for in the local document. This condition was canceled by Federal Law No. 312.

AO Rules

They are established in the Federal Law No. 208. As in the previous case, the management of the affairs of the company can be carried out by one entity independently or together with the board. The management apparatus is accountable to the board of directors and the general meeting. In the local document of the company, providing for joint management, the competence of the collegiate structure is determined. The sole executive body of the legal entity in this case holds the position of its chairman.

Competence of the head of JSC

The President of the company decides all issues related to the management of the current work of the company. Its competence does not include tasks assigned to the jurisdiction of the supervisory board or the general meeting. The head of the company without a power of attorney represents its interests, makes transactions on its behalf, hires employees, dismisses them and transfers them, gives instructions and issues orders thatmandatory for all employees.

The procedure for creating an executive body in JSC

In accordance with the general rule, the formation of a management structure at an enterprise falls within the competence of the meeting of shareholders. It also decides on the early dismissal of the subject from office. Owners of voting shares participate in these procedures. Decisions are taken by a majority of the total number present at the meeting. These issues may also be included in the competence of the Supervisory Board.

Information in the Unified State Register of Legal Entities

All data of the sole executive body of a legal entity must be entered into the Unified State Register. If any information is changed, the entry in the Unified State Register of Legal Entities is subject to adjustment. The list of mandatory information that must be entered into the Unified State Register is defined by Art. 5 Federal Law No. 129. These include:

1. Location (address) of the permanent executive body of the enterprise. In its absence, information about the subject en titled to carry out activities on behalf of the company without a power of attorney is indicated. The address is required to contact the company. In the case when the company has a manager - a citizen or another enterprise - the place of residence or location is indicated, respectively.
2. Full name, title of the position of the subject en titled to carry out activities without a power of attorney on behalf of the organization. Additionally, the data of the passport or other document confirming the identity in accordance with existing legislation is indicated. If available, TIN is entered in the Unified State Register of Legal Entities.

Labor relations

They are regulated by the Labor Code of the Russian Federation. Labor relations with the sole management body are regulated by Ch. 43 of the Code. In Art. 273 of the Labor Code explains the concept of a leader. It is a citizen who, in accordance with regulatory, including local acts, manages the enterprise, performs the functions of its executive (sole) body.

Termination of employment contract

In addition to general grounds, in Art. 278 of the Labor Code establishes additional conditions for terminating the contract. These include:

1. Removal from office of the head of the debtor enterprise in accordance with the provisions of bankruptcy (insolvency) legislation.
2. Adoption by the authorized body of the organization or the owner of its property (his representative) of the decision to terminate the contract. Termination of labor relations with the head of a unitary enterprise is carried out by the body appointed by the owner of material assets, in the manner determined by the government.
3. Other grounds provided for in the contract.

Guarantees for the leader

When terminating the contract on the grounds provided for in paragraph 2 of Art. 278 of the Labor Code, in the absence of guilt in the actions / inaction of the director, compensation must be paid to him. Its value is established in the employment contract. In this case, the amount of compensation cannot be less than three timesaverage earnings per month. This rule is established in Art. 279 TK. Upon termination of the contract with the head of the enterprise, as well as the deputy director and chief. accountant due to the change of ownership, the new owner of the company's property is obliged to pay monetary compensation to these employees. Its value must be at least 3 times the average salary per month. This rule is established by Art. 181 TK. The head of the enterprise has the right to terminate the employment contract ahead of schedule. At the same time, he is obliged to warn the owner about this 1 month in advance. Notice shall be given in writing.

Responsibilities

The laws governing the activities of organizations define the responsibility of the executive body. When exercising his rights, he is obliged to act reasonably, solely in the interests of the enterprise. All losses caused through the fault of the manager must be compensated in full. The financial responsibility of the executive body is established by Art. 277 TK. The manager is responsible for the actual direct damage caused to the firm. The calculation of losses incurred as a result of his actions / inactions is carried out in accordance with the norms of the Civil Code. The leader is not held liable:

1. Voted against the decision causing damage.
2. Not participating in the meeting at which the resolution was adopted, as a result of which losses arose.

Explanations

When establishing the grounds and degree of responsibility of the head, the usual rules of business turnover and othercircumstances of significant importance. Material compensation is provided only if the guilt of the subject is established. In Part 1, Clause 1, Art. 401 of the Civil Code, it is determined that a manager who has not fulfilled obligations or fulfilled them improperly is liable under the law, except in cases where other grounds are provided for by the contract or other regulatory acts. The subject may be found not guilty if he has taken all necessary measures, with the degree of diligence and care that was required of him, to exclude damage. According to paragraph 4 of Art. 401 of the Civil Code, an agreement concluded in advance on the limitation or exclusion of liability for intentional failure to fulfill an obligation is considered void. In accordance with the law, any of its participants has the right to file a claim for compensation for harm caused to the organization by the head.

Rules for applying sanctions to the manager

According to the law, this person is subject to the provisions of paragraph 3 of Art. 401, unless the law or the contract provides for other conditions of liability. Appropriate sanctions are applied to the subject if he fails to fulfill his obligations, unless he proves that their fulfillment was impossible for good reasons, force majeure circumstances (unavoidable and extraordinary under specific conditions). These cannot include, for example, violation of obligations by counterparties, lack of necessary products on the market or monetaryfunds from the debtor himself.

Implementation of sanctions against collegiate leadership

If an organization is managed by several entities jointly, they are jointly and severally liable. Sanctions can be applied only to those members of the collegiate management who voted for the decision that resulted in damage to the firm. Abstentions are also liable for losses.