Change and dismissal of a director in Belarus
STEP-BY-STEP INSTRUCTIONS FOR CHANGE OF DIRECTOR
Cases of replacing one director with another are quite common in practice. This is due to dissatisfaction on the part of the management with the qualifications of the director or, for example, the director’s departure on maternity leave. Whatever the reasons for changing the director, there is a certain order of this procedure, which is the same in all cases.
Change of director is the competence of the General Meeting or the owner of the property of a unitary enterprise; sometimes the supervisory board of the organization is vested with this right.
The procedure for changing a director can be divided into several stages, such as: dismissal or sending a director on vacation, appointing a new one, and notifying the necessary authorities.
Let’s consider each stage of this process in more detail.
Grounds for the director’s dismissal
The general grounds for the director’s termination of his powers may be: self-relinquishment of powers, termination of the contract, maternity leave, any other grounds provided for in the Labor Code.
In a situation where the director leaves his post due to non-renewal of the contract or by agreement of the parties, he sends the General Meeting or the founder, if such is the only one, a letter of resignation.
If the reason for leaving was the desire of the founders of the organization or other grounds, then the general meeting or the founder makes a decision to dismiss the director, which is drawn up in minutes.
Additional grounds for dismissal inherent in a director are the bankruptcy of the company and the decision of the owner or other authorized person.
Regardless of the grounds for dismissal, the company issues an order to this effect no later than the date of the last working day of the director.
Let us dwell on a more detailed examination of the second additional ground, which is enshrined in Article 259 of the Labor Code.
Dismissal of a director under article 259 of the Labor Code
Attention should be paid to such facts in Article 259 of the Labor Code as the fact that the decision to dismiss a director can be made by the owner for any reason, including being without any motivation. Another circumstance provided by this article is the absence of any illegal actions on the part of the director, since in this case he may be dismissed for other reasons.
Upon dismissal of an employee under this article, monetary compensation is paid for early termination of the employment contract. This responsibility rests with the owner of the property or the founders.
The employer is not required to notify the director of his dismissal under this article. However, upon termination of the employment contract on the initiative of the director, he must notify his employer one month in advance. Otherwise, the manager will have to pay monetary compensation to the organization in which he worked.
Inventory and case transfer
Previously, the legislation of the Republic of Belarus provided for an inventory when changing the director of a company, but since January 1, 2014, the Law “On Accounting and Reporting” does not provide for mandatory inventory taking in the event of a change in the head of an organization. However, it should be noted that when a manager is dismissed, an inventory of those assets and liabilities for which he is a financially responsible person is carried out, as well as if the inventory is provided for by other regulatory legal acts of the Republic of Belarus.
It will also be advisable to focus on the transfer of the seal and the preparation of the act of acceptance and transfer of affairs of the old director to the new one.
Payment of compensations and benefits when changing director
The legislation provides for compulsory payments for all employees leaving their position, including the director. This payment includes compensation for the employee’s unused leave. If the employee has not worked for a year, then monetary compensation for labor leave is paid in an amount proportional to the hours worked.
Severance pay is paid under the following circumstances:
If the director refuses to transfer to another locality or to work with changed working conditions;
In case of refusal to work due to a change in the owner of the property or reorganization;
Liquidation or reduction of staff;
If you have health problems, or lack of qualifications, which prevents you from continuing to work;
Restoration of the previous employee.
Severance pay is possible only for the above reasons for dismissal. The basis for its receipt is the order of the employer to dismiss the employee.
All payments must be made no later than the date of dismissal.
IS IT POSSIBLE TO DISMISS THE DIRECTOR AND NOT APPOINT A NEW
The absence of a director in the organization entails the suspension of its activities; to prevent such a situation, a new director must be appointed along with the removal of the old director.
The general meeting or the owner concludes an employment contract with the new director, determines the term of his office and compiles his personal file.
In a situation where the old director is not dismissed, but went on maternity leave, the new director is appointed before the old director leaves the parental leave.
As a result of the decision to appoint a new director and the signing of an employment contract with him, an order is issued.
An employment contract and order may be signed by the chairman of the general meeting, another member who is authorized to do so, a member of the supervisory board, if provided for in the charter, or by the owner of the property in the case of working in a unitary enterprise.
The date of the adoption of a new director should not be earlier than the date of dismissal of the previous one, since there cannot be two directors in the organization.
NOTICE TO THE REGISTRATION BODY ON THE CHANGE OF DIRECTOR
The registration authority must be notified of the change of director without fail. This is given 10 working days from the date of the director’s dismissal, and there is also a special form and procedure for notification. It is allowed to notify the registration authority in electronic format using the USR portal.
This provision does not apply to banks, other credit organizations and insurance organizations.
NOTIFICATION TO OTHER STATE BODIES ON THE CHANGE OF DIRECTOR
In addition to notifying the registering authority, it will be appropriate to notify other state bodies that may be interested in this.
There is no specific obligation on the employer to notify various government agencies. The authorities concerned include the tax authorities, the Federal Tax Service, the statistical authorities and Belgosstrakh at the place of registration of the payer.
The notification is accompanied by copies of the order on the appointment of a new director, the decision of the general meeting on the appointment of a new director, the contract concluded with the new director, notification of the registering authority.
The legislation also does not establish the obligation to notify its counterparties about the change in management. However, some contracts with counterparties may contain such an obligation. In this case, counterparties should be notified in writing of the appointment of a new manager.
After taking office, the newly appointed director must contact the servicing bank in order to change the card with sample signatures.
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