Role of the management board
The main role of the management board is to manage the business and to represent the limited liability company at its own risk.
Composition and appointment of the management board
The management board of a company consists of one or more directors.
If the management board has more members, and unless otherwise stipulated in the articles of association, all members jointly take actions necessary for the management of the company.
The management board is usually appointed by the assembly, i.e. shareholders of the company, but this power can be given to other bodies as well.
The board member may also be a foreign citizen. Board member must be a natural person with full legal capacity.
Termination of a member of the management board
The assembly or other body which appointed the management board may recall the management board member at any time. Also, board member may resign as a board member, regardless of the claim for damages that a limited liability company may have on their resignation.
The members of the management board, their power of representation and any changes are immediately entered in the court registry.
There are extraordinary situations when the number of the management board members falls below the number determined, by the articles of association, as the minimum number of members for management and representation of the company (death, resignation of the existing director or dismissal).
In such a case, there are the following options for appointing new management board members:
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shareholders of the company must immediately appoint the missing board members - until the appointment, the remaining members of the management manage only urgent tasks;
- it may also be stipulated in the articles of association that while the shareholders of the company do not appoint new members, the supervisory board may appoint the missing members;
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if all members of the management board are dismissed, the supervisory board must immediately appoint the management board members;
- if the company does not have a supervisory board, the court will appoint a temporary administrator at the proposal of the interested party (creditors, shareholders) or ex officio - his duty is to take care of the appointment of the new management board (e.g. convocation of assembly), and until then he is authorised to perform only urgent tasks (he is entitled to a remuneration for his work);
A member of the management board who is also shareholder of the company may be revoked by a court decision if there is an important reason for doing so (for example, failure to file for bankruptcy proceedings, the establishment of a new company by that member of the management board without the consent of other shareholders of the company or the supervisory board, where such new company engages in competitive activity).
Shareholders of the company who did not vote to revoke member of the management board may be sued before the court to agree to the revocation
The court may, in the course of the proceedings, by interim measure prohibit a member of the management board, whose revocation leads to a dispute, to conduct a business and represent the company, if it is probable that its continued action would cause irreparable harm to the company. In that case, if the company does not have the members of the management board necessary to represent it, the person authorised to represent it will be appointed by the court at the proposal of the interested party, until the company appoints the appropriate board member, or until the court appoints a temporary administrator.