Grounds, procedure and legal consequences of the executive body head’s dismissal in a legal entity

Abstract

The article is devoted to the analysis of the grounds, procedure and legal consequences of the executive body head’s dismissal in a legal entity. The executive body’s head is authorized to act on behalf of the legal entity, to exercise its rights and perform its duties. In a legal entity the chief’s (director’s, general director’s) presence is mandatory. It has been argued in the study that executive body’s head should be elected by the decision of the authorized body (general meeting or supervisory board). The decision of the same body is the basis for termination of powers of such an official.
 It has been established that depending on the contractual framework, which is the basis of relations between the legal entity and the head of its executive body, the grounds for dismissal are enshrined either in the Ukrainian Labor Code or in the civil legislation and also directly in the contract.
 It has been substantiated that the requirement of obligatory simultaneous decision-making on termination of powers of the executive body’s head and appointment of another person to the specified position contradicts the legal rights and interests of the person wishing to terminate their powers in the specified position.
 The foreign experience of directors’ dismissal from legal entities has been analyzed. Emphasis has been placed on the simplified procedure of terminating the powers of the executive body’s head at their will. Attention has been drawn to the existence of personal liability under New Zealand law in case of failure to appoint a director. The advantages and disadvantages of applying this approach in national legislation have been described.
 The expediency of consolidating the possibility of dismissal from the position of the executive body’s head, especially at will of this person, without the simultaneous appointment of a new head has been substantiated. The absence of the legal entity’s head or its acting director within 6 months has been proposed to be considered as a ground for appealling to the court with a claim about compulsory liquidation of the legal entity. Relevant functions have been proposed being assigned to the state registrar.