Change of the director of the joint-stock company

The director is the management body of the joint-stock company, which carries out the current management of its activities.

A change of director is an important event in the life of a joint-stock company, which can have significant consequences for its activities.

So, let’s consider the legal aspects of changing the director of a joint-stock company in Ukraine.

The legal basis for changing the director of a joint-stock company is the Civil Code of Ukraine, the Law of Ukraine “On Joint-Stock Companies” and other legislative acts.

The director of a joint-stock company can be changed in one of the following cases:

• Expiration of the director’s term of office. The director’s term of office is determined by the charter of the joint-stock company, but may not exceed five years.
• Dismissal of the director. The dismissal of the director from the position may take place at the director’s own will, by decision of the general meeting of shareholders, as well as in cases provided for by law or the charter of the joint-stock company.
• Death of the director. In the event of the director’s death, his powers are terminated.

The reasons for changing the joint-stock company may be the following:

• Unsatisfactory fulfillment of his duties by the director. In this case, the dismissal of the director may be proposed by the general meeting of shareholders or the supervisory board of the joint-stock company.
• Change in the development strategy of the joint-stock company. In this case, a change of director may be necessary to implement a new strategy.
• Other reasons are provided by the law or the charter of the joint-stock company.

The procedure for changing the director of a joint-stock company is determined by the charter of the joint-stock company.

As a general rule, the director of a joint-stock company is changed based on a decision of the general meeting of shareholders. The decision to change the director is made by a simple majority of votes of the shareholders present at the general meeting.

If the charter of the joint-stock company provides that the supervisory board of the joint-stock company has the right to appoint and dismiss the director, then the director is changed based on the decision of the supervisory board.

However, we draw your attention to the fact that in a private joint-stock company, in which the number of shareholders does not exceed ten, the director can be changed by the decision of the founders of the company.

The procedure for changing the director of a joint-stock company includes the following stages:

1. Preparation for the change of director. At this stage, it is necessary to determine the grounds for changing the director, as well as to select the candidacy of a new director.
2. Deciding to change the director. The decision to change the director is made by the general meeting of shareholders or the supervisory board of the joint-stock company.
3. Dismissal of the previous director. The dismissal of the previous director is carried out based on the decision of the general meeting of shareholders or the supervisory board of the joint-stock company.
4. Appointment of a new director. The appointment of a new director is carried out based on the decision of the general meeting of shareholders or the supervisory board of the joint-stock company.

Therefore, the change of the director of a joint-stock company is an important event in the life of the company, which can have significant consequences for its activities.

For the procedure of changing the director to be carried out correctly and on time, it is necessary to comply with the requirements of the law and the charter of the joint-stock company.