Registration of a change in the head of a legal entity

Legal regulation of the process of changing the head of a legal entity includes both general provisions of corporate legislation and specific requirements for registration procedures.

In accordance with the legislation of Ukraine, the change of the head of a legal entity is subject to state registration, which allows it to be recognized as official both for the company’s internal purposes and for interaction with third parties and state bodies.

The Law on State Registration specifies that changes in the management of a legal entity must be officially registered in a single state register, which ensures the publicity of information and the legal validity of such changes.

The head of a legal entity is an official who carries out the current management of the company’s activities and represents its interests in interaction with third parties, state bodies and judicial authorities. The legal status of the manager can be fixed both in the charter of the legal entity and in the employment contract (contract) with the manager.

According to the legislation, the head of a legal entity has the right to act on behalf of the company without a power of attorney, which makes him a key figure in corporate governance. Therefore, changing the manager without proper registration can lead to serious legal consequences, including the invalidation of agreements concluded by the new manager before his official registration.

The change of the head of a legal entity begins with the adoption of a relevant decision by the authorized bodies of the company. Depending on the organizational and legal form of the legal entity, it can be a decision of the general meeting of participants (for LLCs) or the supervisory board (for JSCs).

The main documents that must be prepared for state registration of a change of manager:

• Minutes of the general meeting or the decision of the supervisory board to change the manager.
• Application for state registration of changes to information about a legal entity.
• Passport data and identification code of the new manager.
• Power of attorney (if the documents are not submitted by the manager himself).

Documents must be drawn up in accordance with the requirements of the law, and signatures on them must be notarized in cases provided for by law.

Documents for registration of a change of manager are submitted to the state registrar or through TsNAP. It is also possible to submit an e-mail. form through the Unified state web portal of electronic services.

After submitting the documents, the state registrar checks them for compliance with the requirements of the law and makes a decision on making changes to the Unified State Register of Legal Entities. The term of consideration of documents usually does not exceed 24 hours from the moment of their submission.

Features of registration of a change of manager in various organizational and legal forms:

• Limited liability company (LLC)

For LLCs, the manager is changed based on the decision of the general meeting of participants. Participants have the right to make a decision on dismissal or appointment of a new manager at any time.

At the same time, the charter of the LLC may contain additional requirements regarding the procedure for changing the manager, in particular regarding the quorum or the voting procedure.

Documents for registration of changes in the management of the LLC include minutes of general meetings and a statement on state registration of changes to the Unified State Register.

• Joint-stock company (JSC)

In the case of a joint-stock company, the decision to change the manager is made by the supervisory board or the general meeting of shareholders, depending on the model of corporate governance provided for by the charter.

It is especially important that in open JSCs, in accordance with the requirements of the law, the decision to change the manager must be published in the relevant stock market register.

• Non-commercial organizations

For non-profit organizations, such as public associations or charitable foundations, a change of manager is also subject to state registration.

The procedure is somewhat simplified compared to commercial organizations, but also requires the submission of an application to the state registrar and minutes of meetings of the organization’s members.

The main problems that arise when registering a change of manager:

• Non-compliance of documents with legal requirements. It can be incorrectly drawn up minutes of meetings, lack of necessary signatures or submission of an incomplete package of documents. Such errors may lead to a refusal to register changes.
• Labor disputes with the previous manager. Often, a change of manager is accompanied by conflicts with the previous manager, which can lead to a delay in the registration process. It is important to ensure that the employment relationship with the former manager is properly formalized, including proper termination in accordance with the law.
• Violation of corporate procedures. Non-observance of internal corporate procedures stipulated by the company’s charter or legislation may also be grounds for invalidating the decision to change the manager.