Requirements for Top Manager’s Notifications in the Era of Messengers

06/ 03/ 2019

Svitlana Svyrydenko. Head of Legal Department, Lawyer with more than 10 years of experience in international consulting, Representative of companies in corporate and labor disputes, Advocate The new law on LLCs has imposed a series of additional obligations for LLC officers to be fulfilled both when taking office and after that. Such obligations exist for Director (members of the Board of Directors), members of the Supervisory Board, and other persons as stipulated by the Charter of the LLC. In practice, some LLC charters regard Deputy Director, Chief Accountant and Heads of some departments as company officers. Some of the new obligations of an LLC officer are as follows: Providing the LLC with the list of his/her affiliated persons when taking office. In this case, the affiliated persons are one’s family members (spouse, parents (adoptive parents), legal guardians (caretakers), siblings, children and their spouses as well as legal entities under the control of the officer and/or his/her family members; Informing the LLC of any change in the affiliated persons list within 5 days of the day when such change became known. How should these notifications be made? The law on LLCs does not provide any requirements for that. Meanwhile, there are some very specific requirements for other sorts of notifications – e.g., the notification on convening a general meeting, which must be sent by the Director/Board of Directors to each shareholder by post with list of enclosed items unless otherwise prescribed by the Charter. So, since the law on LLCs does not provide any requirements for affiliated persons notifications, such notifications may be sent by any means, e.g., also via e-mail or messengers. However, one should focus on two aspects when sending such notifications: The LLC must be the addressee; There must be evidence that the notification has been made (in case a dispute arises). So, the means of sending notification should be selected based on the above criteria. Moreover, it is recommended to set out requirements for the notification format in the Charter based on communication specifics in the LLC. This is important, given the risk that the LLC may terminate agreement (contract) with the officer without compensation if he/she fails to send notification. However, it is questionable whether this risk is realistic. E.g., for LLCs with single Director and no Supervisory Board, the Director will have to actually send such notifications to himself/herself, although the law on LLCs neither requires notifying the shareholders directly, nor grants them access to such information. Look forward to seeing you at the open lecture on 26th of March, for registration follow the link.

Svitlana Svyrydenko

Head of Legal Department, Lawyer with more than 10 years of experience in international consulting, Representative of companies in corporate and labor disputes, Advocate

The new law on LLCs has imposed a series of additional obligations for LLC officers to be fulfilled both when taking office and after that. Such obligations exist for Director (members of the Board of Directors), members of the Supervisory Board, and other persons as stipulated by the Charter of the LLC. In practice, some LLC charters regard Deputy Director, Chief Accountant and Heads of some departments as company officers.

Some of the new obligations of an LLC officer are as follows:

Providing the LLC with the list of his/her affiliated persons when taking office. In this case, the affiliated persons are one’s family members (spouse, parents (adoptive parents), legal guardians (caretakers), siblings, children and their spouses as well as legal entities under the control of the officer and/or his/her family members;
Informing the LLC of any change in the affiliated persons list within 5 days of the day when such change became known.

How should these notifications be made? The law on LLCs does not provide any requirements for that. Meanwhile, there are some very specific requirements for other sorts of notifications – e.g., the notification on convening a general meeting, which must be sent by the Director/Board of Directors to each shareholder by post with list of enclosed items unless otherwise prescribed by the Charter.

So, since the law on LLCs does not provide any requirements for affiliated persons notifications, such notifications may be sent by any means, e.g., also via e-mail or messengers.

However, one should focus on two aspects when sending such notifications:

The LLC must be the addressee;
There must be evidence that the notification has been made (in case a dispute arises).

So, the means of sending notification should be selected based on the above criteria. Moreover, it is recommended to set out requirements for the notification format in the Charter based on communication specifics in the LLC.

This is important, given the risk that the LLC may terminate agreement (contract) with the officer without compensation if he/she fails to send notification. However, it is questionable whether this risk is realistic. E.g., for LLCs with single Director and no Supervisory Board, the Director will have to actually send such notifications to himself/herself, although the law on LLCs neither requires notifying the shareholders directly, nor grants them access to such information.

Look forward to seeing you at the open lecture on 26th of March, for registration follow the link.