Head of practice
Attorney. Specialist in commercial and labor law. Over 16 years of experience in legal support of businesses - debt recovery, contract enforcement, recovery of damages, commercial property and lease disputes.
Dismissal of the LLC director
Termination of employment relations of the director (manager) with a limited liability company (LLC) is at the same time the termination of powers as an executive management body. Because of this, the dismissal of the head of an LLC is not simple and requires a long process of processing all procedural issues. In more detail, how this happens and how we can help you, we will analyze in the article below.
Director of an LLC: what are the main difficulties of dismissal?
Termination of the powers of such a person is a complicated process, since the manager has a dual legal status: an employee and an official of a limited liability company. The main difficulty lies in the fact that the director cannot simply initiate the specified procedure at his own discretion, relying on the norms of the Labor Code of Ukraine (LC). According to current national legislation, only the body that appointed him can dismiss the manager, that is, the general meeting of participants (founders). Without a properly drawn up decision, it is practically impossible to dismiss the manager.
Moreover, the whole procedure is also complicated by:
- the terms of warning by the person about his desire to resign (this must be done not in two weeks, as provided for in the LC, but in a month);
- the obligation to undergo the procedure for transferring all management affairs of the limited liability company to the new manager (if necessary, an audit);
- the need to make changes to the unified register of legal entities and notify individual state bodies about a change in the management.
Can a director of an LLC resign solely at his own request?
No, the desire itself, based on the above, is not enough. Such a decision must be agreed upon by the other participants (founders) of the LLC at the general meeting, after which a corresponding order is issued to terminate the powers.
Procedure for dismissing a director of an LLC: what are the main stages?
Writing a statement
A statement is a formal notification of the manager to the highest corporate body about his intention to resign. Therefore, it indicates the addressee (general meeting), the formulation of the reason and the date of renouncing his powers (taking into account all the deadlines specified in the current legislation).
Convening a general meeting of participants
The initiator of convening a general meeting of a limited liability company is the director. As part of such a procedure, the participants must consider the person’s statement and appoint a successor. The result of such an event is the execution of an official protocol, which serves as the sole legal basis for the further termination of the powers as an executive body and the issuance of a corresponding order.
Issuance of an order to dismiss (replace) a person
After the protocol is adopted, the director issues an order to dismiss him/her, after which a personnel calculation is carried out. On the appropriate day, the manager is also issued a work book with a record of dismissal, a copy of the order, and a final calculation of wages and possible compensation is made. It is worth emphasizing that LLCs must simultaneously with the decision to dismiss the current director appoint a new one. Therefore, the final stage before registering the changes will also be the issuance of an appropriate order to appoint a person to the relevant position.
Entering information into the register, notifying state bodies
Changes become legally effective only after they are entered into the unified state register. To do this, you need to contact the state registration authority, submitting an application, minutes of the general meeting, an order appointing a new one, a document on payment of the administrative fee. After that, it is also worth sending official notifications to the State Tax Service, the Federal Tax Service and state statistics agencies.
Which courts can consider a dispute that arose during the dismissal of the LLC director?
This type of dispute will be both labor and corporate in nature. Investigating various situations in which a dispute may arise between a limited liability company and a director, our lawyer systematizes them as follows:
- the legality of the decision (protocol) on termination of powers is challenged – commercial jurisdiction;
- the order on termination of powers and compliance with the procedure by the employer is challenged – civil jurisdiction.
How can corporate law lawyers of the company “Prikhodko & Partners” help?
Corporate law lawyers of our company, having the appropriate experience and qualifications, provide comprehensive support in all matters related to a limited liability company. Ensuring the legal purity of the process, they:
- first, analyze the constituent documents and employment contract to determine the procedure for the termination of the director’s powers;
- second, accompany the procedure for initiating the convening of the constituent meeting;
- third, represent the interests of the person when resolving the issue of termination of his powers;
- fourth, assist in the development of a protocol, personnel order;
- fifth, accompany the introduction of changes to the state register and official notification of state bodies;
- finally, monitor the legality of the payment of compensation to the director (if necessary).
Do you have any questions? To get advice from a corporate lawyer and find out the cost of his support in the matter of dismissing an LLC director, fill out the form below.
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