CEO. Responsibilities and functions of the General Director

From a legal point of view, these terms are almost identical: the founder is the participant involved in the creation of the LLC. We will not take this minor difference into account below. Management in an LLC can be:

Three-level, including:
- general meeting of participants (GMS);
- board of directors (BoD);
- one or more executive management bodies.
Two-level, without the formation of diabetes. For an LLC with 1 participant, having a board of directors in the management system does not make practical sense; in this case, a two-level management system is used.

Executive power in an LLC can be organized in 3 ways:

Sole executive body.

Advantages of an LLC with one founder - he is also the director

Thus, the Pension Fund of the Russian Federation in its Letter dated May 6, 2016 No. 08-22/6356 “On reporting” indicated the following:

In accordance with paragraph 2.2 of Article 11 of the Federal Law of 04/01/1996 N 27-FZ “On individual (personalized) accounting in the compulsory pension insurance system” (which entered into force on 04/01/2016), the policyholder provides monthly information about each insured person working for him . Reporting is presented in the form SZV-M, approved by Resolution of the Board of the Pension Fund of the Russian Federation dated 01.02.2016 N 83p. When implementing this norm, working citizens are understood to be persons specified in Article 7 of Federal Law No. 167-FZ of December 15, 2001 “On Compulsory Pension Insurance in the Russian Federation,” which includes those working under an employment contract, including heads of organizations who are the only participants (founders), members of organizations.

What responsibility does the founder of an LLC bear in 2018?

Description of the position of the General Director The General Director is appointed by a person representing the sole management body of a commercial company, most often a joint-stock company or a limited liability company. He may be the owner, co-owner of the business or, conversely, not have a share in the capital of the company, but be an employee. This designation of the position of a key figure is typical for developed multi-level structures, including several separate divisions.
Each independent enterprise or branch, representative office included in the united group of companies is headed by a director responsible for the work of the constituent unit. Subordinate to the general director there may be several directors vested with powers within the framework of the regulations on the structural unit and a power of attorney to exercise management in any area.

If the only participant (founder) is the director of the organization

Labor Code) and the norm for calculating wages in proportion to the established working hours (Article 285 of the Labor Code). IMPORTANT! The rule on the need for permission to work part-time from the higher management body of the LLC, contained in Art. 276 of the Labor Code does not apply to the founding director, since it is in Ch. 43 of the Labor Code, and this chapter does not apply to this situation. Please note that a large number of simultaneously held director positions is a reason for inspection by the tax inspectorate.
Thus, one of the criteria for the possible unreliability of information included in the Unified State Register of Legal Entities is the combination of more than 5 such positions in different organizations by an individual holding a director position (letter of the Federal Tax Service dated August 3, 2016 No. GD-4-14/14126@). An LLC with one participant (aka director) is a very common and convenient practical instrument of entrepreneurship in business life.

What is the difference between the position of director and CEO?

Law enforcement practice: TD with a director in an LLC with one participant (aka director) As a result, different law enforcers expressed different views on this subject and formed different law enforcement practices in their activities. Let's consider the points of view expressed.

Rostrud, in letter No. 177-6-1 dated March 6, 2013, stated that an employment contract with the director in this case is not concluded.
On the website onlineinspektsiya.rf (information portal of Rostrud) on March 10, 2015, the answer was given that the TD (and no other agreement) in such a situation is not concluded, the director’s salary is not accrued, and contributions to the Pension Fund and Social Insurance Fund are not made. But on March 17, 2016, the opposite answer was given to the same question: the TD is concluded, the salary is accrued.
The Ministry of Health and Social Development believes that in this case, labor relations arise regardless of whether the TD is concluded or not (order No. 428n dated June 8, 2010).

By virtue of Article 39 of the LLC Law, the appointment of a person to the position of director is formalized by the decision of the sole founder of the company, therefore, labor relations with the director as an employee are formalized not by an employment contract, but by the decision of the sole participant. Accordingly, such an employee who has a labor relationship with the company has the right to compulsory social insurance provided for by the Labor Code of the Russian Federation and the Federal Law “On the Fundamentals of Compulsory Social Insurance.”

The FAS of the West Siberian District in the Resolution of the FAS of the West Siberian District dated November 18, 2009 in case No. A45-11064/2009 indicated: “According to Article 6 of the Federal Law of July 16, 1999

Labor Code of the Russian Federation.

The Supreme Arbitration Court of the Russian Federation dated 06/05/2009 No. VAS-6362/09 in case No. A51-6093/2008,20-161 in the Determination substantiated this position with the following arguments:

in accordance with Article 273 of the Labor Code, the provisions of Chapter 43 on the specifics of regulating the labor of the head of an organization and members of the collegial executive body of organizations apply to heads of organizations regardless of their organizational and legal forms and forms of ownership, except in cases where the head of the organization is the only participant (founder) , a member of the organization, the owner of its property. The stated provision does not mean that these persons are not subject to the Labor Code of the Russian Federation.

Who is the head of the organization - general director or founder

Practitioners assume that:

laws do not prohibit the sole participant (founder, member, property owner) of an organization from becoming its leader (i.e., managing this organization, including performing the functions of its sole executive body). Thus, from Article 88 of the Civil Code and Articles 2, 7, 11 of the Federal Law “On Limited Liability Companies” (hereinafter referred to as the LLC Law) it follows that an LLC can be founded by one person or may consist of one person. And from Article 39 of the Law on LLCs, it follows that the highest management body in an LLC is the general meeting of its participants; if there is only one participant, he makes the decisions of the only participant.

The sole founder of the company decides who will manage the organization.

Info

In practice, this body/position is most often referred to as “general director,” although other names are also found.

A sole executive body together with a collegial executive body (usually called “board” or “directorate”).
A management company is another legal entity that performs the functions of an executive body.

A number of issues fall within the exclusive competence of the OSU, i.e. their resolution cannot be transferred to another body of the LLC by the company’s charter.

Attention

The important ruling of the Supreme Court of the Russian Federation dated February 28, 2014 No. 41-KG13-37 concluded that such labor relations are regulated by the general provisions of the Labor Code (remember that Chapter 43 of the Labor Code does not regulate them). This point of view is confirmed in paragraph 1 of the Supreme Arbitration Court Resolution No. 21 dated June 2, 2015). A number of court decisions concluded that labor decisions arise on the basis of the decision of a single participant, and registration of a TD is not required (Determination of the Supreme Arbitration Court of June 5, 2009 No. VAS-6362/09).

The founder and director are one person: risks What should an entrepreneur do in such a situation? There is no clear answer. But we believe that the risk of adverse consequences is much higher in the absence of a TD with the director. Rostrud, which is a control body in the labor sphere and is authorized to conduct inspections and impose administrative penalties, as mentioned above, often changes its point of view on this issue.
Federal Law “On the Basics of Compulsory Social Insurance” (hereinafter referred to as Law No. 165-FZ) subjects of compulsory social insurance are policyholders (employers) and citizens of the Russian Federation working under employment contracts.

Article 9 of Law No. 165-FZ establishes that relations under compulsory social insurance arise for all types of compulsory social insurance from the moment an employment contract is concluded with an employee;
in accordance with Articles 11, 16 of the Labor Code of the Russian Federation, labor relations that arise as a result of the election or appointment of a director of a company are characterized as labor relations on the basis of an employment contract. A person appointed to the position of director of a company is its employee, and the relationship between the company and the director as an employee is regulated by labor law.

The nature of labor relations is hired (non-independent) labor. In the situation described above, the lack of independence of labor is lost, since he exercises employer powers in relation to himself.

Currently, this point of view is shared by Rostrud (Letter dated March 6, 2013 No. 177-6-1) and the Ministry of Finance of Russia (Letter dated October 17, 2014 No. 03-11-11/52558), i.e. in fact, officials deny the very possibility of labor relations.
The same point of view was previously held by the Ministry of Health and Social Development of Russia, justifying it by the fact that the basis of Part 2 of Article 273 of the Labor Code is the impossibility of concluding an employment contract with oneself, since the organization simply does not have other participants (members, founders).

The activities of the General Director of the OJSC are aimed at increasing the funds used in circulation. Providing annual profits for subsequent distribution as dividends among all shareholders is also part of his professional interests. The share of each shareholder is determined on the basis of an approved resolution adopted by the general meeting of shareholders.

The procedure for appointing the general director of a joint stock company

The only body authorized to appoint a person to the specified position is the general meeting of shareholders (GMS). One of the members of the board of directors (BoD) of the OJSC has the right to apply for this vacancy. The charter of a legal entity plays an important role here. It is allowed that the CEO may be the chairman of the board of directors. A contract must be concluded with the person appointed to this position. It sets out the rights and obligations of the parties. All provisions of the contract are approved by a collegial decision of the general meeting of shareholders.

Rules for concluding a contract

The last point deserves special attention. Shareholders often ignore it. Lawyers say there is no direct rule governing this issue. Despite this, it is better to approve all the requirements and nuances of the contract in advance. This will allow greater control over the performance of the general director of the OJSC. Separately, the contract specifies the limits of competence, rights and obligations.

The procedure and amount of remuneration are specified in the document. You should not omit the list of grounds for early termination of the contract in the document. In the event that the General Director cannot (or is not able to) permanently or temporarily perform official duties, a repeated meeting of the members of the board of directors is necessary. Their task is to select an interim executor. In the event that a temporary inability to perform direct official duties has developed into a permanent one, the board of directors at the next meeting raises the issue of appointing a new general director.

Features of termination of a concluded contract

In the event that a person appointed to this position is removed from it by decision of the board of directors, he is required to submit a report on the work done. This is done within the time frame specified in the contract he signed.

The task of the Board of Directors is to transfer to the General Director certain rights necessary for the performance of direct official duties.

All instructions and orders of the General Director are binding for all company personnel. Legislation does not allow the board of directors to limit the powers of the specified position. In this case, the board of directors may make a proposal to recall the general director.

His duty is to strictly implement the decisions approved by the general meeting of shareholders. The director performs all actions on behalf of an open joint stock company without a power of attorney. He has the right to represent the interests of a legal entity on domestic and international platforms. In addition, the General Director manages the property and funds of the company. The procedure for this is regulated by the charter and decisions of the general meeting.

Throughout his entire activity, the manager issues orders and makes decisions regarding the operational activities of the company. Responsibilities for implementing the decisions of the general director rest with the board. With mandatory agreement with the manager, the Council appoints members of the board.

CEO- is the head of the production and economic activities of the enterprise.

The General Director is responsible for the safety and effective use of the enterprise's property, for the consequences of decisions made, and the financial and economic results of the Company's activities.

The functions of the general director are to generally manage the production and economic activities of the company.

It is the general director who bears full responsibility for all decisions made, for the results of the enterprise’s activities and the safety of its property.

Requirements for the General Director

The main requirements for the General Director are as follows:

availability of higher education (often required in economics, law or relevant to the company’s work profile);

Having experience in a managerial position, usually at least two years;

having work experience in a field relevant to the company’s activities;

knowledge of regulations and legislation;

Confident use of a personal computer.

Functions of the General Director

The General Director of the Company is assigned the following functions:

ensuring compliance with the law in the Company's activities;

management of the financial and economic activities of the Company in accordance with the Charter of the Company;

organizing the work of the Company in order to achieve effective interaction between all structural divisions of the Company;

execution of instructions from the general meeting of shareholders and the Board of Directors of the Company.

Job responsibilities of the General Director

The General Director is assigned the following job responsibilities:

management of the financial and economic activities of the Company;

organization of work in order to implement effective interaction between the Company’s divisions;

ensuring the fulfillment of all obligations of the Company to creditors;

organizing accounting, ensuring the preparation of all forms of reporting;

approval of the Company's staffing table, job descriptions for the Company's employees;

taking measures to provide the Company with qualified personnel;

taking measures to provide the Company with all necessary property;

ensuring the safety of the Company's property;

ensuring the protection of the Company's interests in court;

implementation of a set of measures to monitor compliance by the Company's employees with the requirements of the legislation of the Russian Federation, internal regulatory documents of the Company and job responsibilities;

implementation of a set of measures to control the implementation of decisions of the general meeting of shareholders and the Board of Directors of the Company;

provision of information and reporting on the activities of the Company to the general meeting of shareholders, the Board of Directors and auditors of the Company.

Rights of the General Director

The General Director has the right:

draw up and sign documents within their competence;

make decisions within their competence;

represent the interests of the Company in relations with third parties;

terminate and conclude business contracts, including employment contracts, on behalf of the Company;

open current accounts of the Company in banks;

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The structure of any enterprise must have a manager. What exactly it is called most often depends on the wishes of the founders and the charter of the enterprise. In the structure of an enterprise, the position of the chief executive officer may be called “director,” “general director,” “manager,” or even “president.” What is the difference? What is the difference between a CEO and a director, and what functional responsibilities does each of them have? Understanding these issues on your own can be difficult. So let's try to do this together.

What is the difference?

So, what is the difference between a CEO and a director? You should not look for a fundamental difference in the names of these positions from a legal point of view. The practical use of concepts is important here.

First of all, the formation of the name of each position is influenced by the organization’s field of activity: business or non-profit activity. Most often it happens like this:

the main figure in the structure of a commercial organization is the general director;
the leading position in a non-profit organization is simply director;
functional manager in a commercial company - director (economics, personnel, public relations, financial, and so on);
the same functions in a non-profit organization are assigned to the deputy director.

What is the difference between a general director and a director in a structure, for example, an LLC? Here everything is built according to a slightly different principle. Every limited liability company usually has a board. Each member is called a director, and the board as a whole is called the Board of Directors. Among them, one chief is selected or appointed - the general director of the LLC. It is he who carries out the main strategic management, based on the opinions and wishes of the Board of Directors.

General Director: features of the position

To understand the difference between a general director and a director, let’s try to figure out what exactly this position is.

As we have already found out, the phrase itself is used to designate the main position in the management of a commercial organization. CEO is not necessarily the same as founding director. He may even be a hired employee and not participate at all in the share capital of the organization. Sometimes the title "CEO" is replaced by other terms. Usually this is the president. But this definition is most often used to name the head of a group of companies, while the general director is the sole head of a separate organization.

Who writes the job description?

In accordance with the legislative framework, the General Director is elected in accordance with the decision of the meeting of the Board of Founders. Based on the minutes of the meeting, an order is prepared to appoint a specific person to this position. In addition, the Founders' Council develops a special job description and employment contract. It is worth noting that these documents are not drawn up for a specific person, but specifically for the position itself, regardless of who occupies it. All working conditions and powers of the general director are prescribed there. Only after these documents have been drawn up is an Appointment Order issued, which is signed by the manager himself. After this, the signature is also placed on the contract and job description.

If we are talking about an LLC created by a group of founders, then the instructions are approved by one of the directors authorized by a general decision of the Board. If there is only one founder of the enterprise, then all decisions are made and approved by him independently. The basis is considered to be the decision to create an LLC, even if he himself is the general director.

Registration requirements

The operating principles of each individual general director may vary depending on the specifics of the enterprise. That is why the job description is being developed. This document reflects all the fundamental operating principles.

A job description usually contains the following sections:

basic provisions;
list of responsibilities of the general director;
rights;

All work is carried out in accordance with this document. Amendments to this instruction are possible only by decision of the Board of Shareholders (founders) of the enterprise.

"General" responsibilities

Regardless of the specifics of the enterprise’s work, several main points can be identified that are prescribed in the job description:

The responsibilities of the general director include general management of the organization’s activities and its employees within the limits of authority specified in the local acts of the LLC. Such acts may include: charter, regulations, collective agreement, employment contract and others. Naturally, compliance with the norms of the current legislation of the Russian Federation is mandatory.
Setting up the efficient operation of the company in accordance with the developed production program, as well as with the involvement of all available resources.
Maintaining an effective personnel policy that will attract experienced specialists to the enterprise. The main role in selecting employees whose knowledge will contribute to increasing profits and competitiveness also falls on the manager.
The responsibilities of the general director include the development and implementation of new long-term plans and ideas that help improve the competitiveness of the enterprise, improve its status and increase profits.
Skillful use of the organization's assets to achieve the assigned task.
Control in all areas of activity, compliance with legislation.
Development of internal acts of the organization in strict compliance with the laws of the Russian Federation.
Representing the interests of the company in interaction with legal entities, individuals, as well as self-government and executive authorities.

The general director also bears financial and legal liability in the framework of administrative or criminal proceedings, compensation for damages in case of violation of the law, as well as damage to the status or property of the company in case of improper performance of his duties.

Who is the director?

As we have already found out, in some cases the term “director” may be identical to that discussed above. However, in Russian practice it is most often used:

to designate the position of a person responsible for the development of one of the functional areas of the business (commercial, financial, development director, human resources director);
to designate the main managerial position in non-profit organizations (school director, park director, museum director).

In the latter case, the phrase “deputy director” is used to designate the head of a functional area. Although, of course, there are plenty of deputies in commercial structures.

Responsibilities

The responsibilities of a director typically include:

organization and effective operation of all structural divisions;
increasing the profitability of the company;
approval of the staffing table;
establishing bonuses and allowances for employees;
ensuring fulfillment of obligations to suppliers, creditors and customers;
delegation of control of certain areas of activity to heads of divisions and branches;
control over the operation of the enterprise structure;
ensuring compliance with the regime of saving financial and labor resources.

The director's responsibilities also include:

drawing up a master plan for the enterprise’s production and its development;
development of the organization’s budget for the year, quarter;
monitoring the accounting of expenditures and receipts of funds, use of materials;
monitoring compliance with financial discipline;
compliance with timely submission of reports to the relevant authorities.

What is the difference between a CEO’s instruction and a simple director’s instruction?

If the structure of the enterprise requires the presence of both a general director and directors of areas, their job descriptions differ radically. The differences primarily lie in the delegation of authority and level of responsibility.

The general director represents the interests of the enterprise as a whole, and the director only within the framework of his division and powers.
The director in this case is appointed not by a decision of the Board of Shareholders, but simply by an Order of the General Director.
If there is a general director, there may be several director positions.
The general director controls and adjusts the activities of the entire organization as a whole, and the director only controls a separate area, for example, the financial part or sales.

Peculiarities of a director’s activities in different areas of business

Despite the fact that every leadership position provides approximately the same powers, different areas of economic activity have their own characteristics. Therefore, in order to hold the position of director or general director in a particular area of business, you need to have some specific skills.

In medical organizations, for example, it is impossible to do without special education.
The general director in the field of trade or provision of services must thoroughly know the legislation in the field of consumer protection.
The general director of a security company must have the opportunity to directly interact with the Ministry of Internal Affairs.
In the housing and communal services sector, the manager must not only personally receive citizens, but also closely interact with suppliers of raw materials to provide the population with high-quality heat, water, electricity, and so on.

In general, everywhere has its own specifics, and the position of director or general director is not only a fancy word and a lot of authority, but also a huge responsibility. Moreover, the louder the word, the greater the responsibility.

Anyone looking for a job has more than once come across advertisements with a fabulous salary and the key phrase “CEO wanted.” The responsibilities of this main character in any company seem simple to many: he sometimes appears in the office, rewards the best, fires the worst. And then he goes somewhere on vacation for the company's profit. In fact, all this is just the visible part of the iceberg called “the responsibilities of the CEO.” Everything is not as simple as it seems at first glance.

Without any embellishment, the busiest person in the company with the largest range of diverse functions and the highest degree of responsibility is the CEO. His responsibilities, in fact, combine everything that other employees must do, plus responsibility for the activities of each of them and the company as a whole.

How to become a general?

By the way, the general director, in most cases, is the same employee, invited by the owner of the company to this high position, thanks to his work experience and professional skills. However, you can “grow up” to this chair in your own team. Here you are a manager, then a senior manager, a marketer, a development director and, finally, a general director. At the same time, your responsibilities will expand. However, for those who want to make a career, this is precisely what is attractive.

CEO. Responsibilities

So, what should this versatile person be able to do? general director represent a very expanded range:

Management of the company in the broad and narrow senses of the word;

Coordination of the activities of all departments (and if there are branches and branches, including those located in other cities and countries): from the selection and hiring of employees to making a decision on their dismissal;

Making decisions on the introduction of certain innovations/changes in work/areas of activity, etc.;

Development of the company both horizontally and vertically (expanding activities, improving the quality of services provided, opening new offices and branches, etc.);

Organization of uninterrupted and efficient work of all departments;

Increase in turnover/sales volumes, etc.;

Settlement of legal, economic and other aspects of the company’s work;

Representation of the company’s interests at various levels (negotiations, conclusion of transactions, signing of certain types of contracts, etc.);

It goes without saying that all of the above points are just a brief summary of the CEO’s job responsibilities, and each of them implies a detailed list of tasks.

What should a CEO know?

The responsibilities of the general director imply that he has a number of knowledge, skills and abilities. Depending on the specifics of the activities of each specific company, this list may vary, but the basic requirements remain the same for all areas. The CEO must know:

Legislation and regulatory framework relating to the area as well as general provisions;

Tax, environmental, labor legislation;

Regulations of federal, regional and local authorities, one way or another affecting the area in which the company operates;

The specifics of production (service provision) that the company is engaged in;

Relevant and related industries;

Methodology for managing production and non-production processes;

Personnel management methodology.

And also have considerable experience in leadership positions, be able to multitask and be clearly aware of the degree of responsibility for all of your actions or inactions.

Despite the abundance and variety of affairs that a general director must deal with, this position is very interesting and allows an ambitious employee to fully realize his potential, receiving not only profit from his work, but also emotional and psychological satisfaction.