Our commercial law contains detailed regulations concerning the most common company – LLC and the position of its representative body – the Manager. The Manager of a limited liability company (LLC) is the main figure who organizes and manages the company’s activities in accordance with legal requirements and the decisions of the general meeting of partners. According to the current legislation, a manager can be both a partner and a person who is not a partner in the company.
Appointment and dismissal of the manager
The powers to elect a manager are within the competence of the general meeting of partners, and the decisions taken to change the circumstances are subject to entry in the TRRYULNTS. The general meeting may also decide to change the manager of an OOD. The company is represented before third parties by the manager. In the case of several managers, each of them may act independently unless the partnership agreement provides otherwise. Other restrictions on the representative power of the manager have no effect in relation to third parties. The name of the manager is entered in the Commercial Register and the Register of Non-Profit Legal Entities (TRJULNTS) upon presentation of a notarized consent with a specimen signature. The manager may be dismissed from office at any time and his name may be deleted from the TRJULNTS.
Management and Control Agreement
The relations between the company and the manager are regulated by a management and control agreement, which must be concluded in writing. The agreement is not an employment contract and the requirements of the Labor Code do not apply to this agreement. It is a matter of good corporate governance practice to regulate in detail the relations between the manager and the company with this agreement. Typically, remuneration, annual bonuses, material benefits and the like are agreed in an annex to this contract. We advise you to consult with a commercial law lawyer before signing a management and control contract. You can book an appointment for a personal consultation with a commercial law lawyer, for more information below:
Lawyer Sofia | Lawyer Plovdiv
0886722772
Attorney Sofia | Lawyer Plovdiv
Representative functions of the manager
The company is represented by the manager, who may act alone or collectively, if there is more than one manager. The law does not limit the number of managers, but in the presence of several managers, each of them may act independently, unless the company agreement provides otherwise. The limitations on the representative power of the manager are not valid in relation to third parties, except for those provided for in Art. 141, para. 2 of the Commercial Code.
Prohibition of competitive activity
The law introduces a prohibition for the manager to engage in competitive activity without the consent of the company. The manager is not entitled to carry out commercial transactions on his own or on behalf of another, to participate in other limited liability companies or to hold management positions in other companies if their activities are similar to those of the company.
Requirements and Limitations for the Manager
The law imposes certain requirements on the persons who may hold the position of manager. A person who has been declared bankrupt, or who has been a manager, member of a management or supervisory body of a company dissolved due to bankruptcy in the last two years prior to the date of the decision to declare bankruptcy, if there are unsatisfied creditors, cannot be a manager. Also, a manager cannot be a person who was in the management or control body of a company for which a criminal decree has entered into force establishing failure to fulfill obligations to create and maintain certain levels of reserves under the Oil and Petroleum Products Reserves Act.
Property liability of the manager
The manager bears property liability for damages caused to the company as a result of culpable and unlawful failure to fulfill his obligations. The manager’s liability is a special property liability that arises from the contractual and organizational legal relationship between him and the company. This liability is governed by Art. 145 of the Commercial Code and includes the culpable, unlawful and harmful failure to fulfill the obligations of the manager, which causes damage to the company.
The manager’s liability does not arise from the general prohibition to harm another, but from the failure to fulfill obligations under a legal relationship arising from declarations of will of both parties.
The case law, established in accordance with Art. 290 of the Civil Procedure Code, is consistent that the special property liability of the manager under Art. 145 of the Contractual Procedure Act is contractual, not tortious, and constitutes compensation for the failure to fulfill a contract for the assignment of management. In this case, the three-year limitation period under Art. 111 b.”b” of the Contractual Procedure Act is applicable. In order to be held liable under Art. 145 of the Commercial Code, it is necessary to prove the existence of a culpable and unlawful failure to fulfill the obligations of the manager regarding the management of the company, which resulted in damages for the company.
It is a matter of good practice to consult with a commercial law attorney before taking action to exercise the liability of a manager, change the manager of an LLC, as well as in other cases related to LLCs or other companies.
You can contact us for consultation and assistance on all matters related to commercial law. Our lawyers have a rich experience in company law and corporate relations.
For more news and information on commercial law, see here:
Do not hesitate to contact us:
Lawyer Sofia | Lawyer Plovdiv
0886722772
Attorney Sofia – city Sofia, square “Positano” No. 3
Lawyer Plovdiv – city Plovdiv, Blvd. “Tsar Boris III” No. 128
0 Comments