Is an Employment Contract Necessary for a Director-Founder? Experts Clarify the Nuances
Eldar Tajibaev noted that there is no clear prohibition in labor legislation against signing an employment contract with the general director, nor is there a direct requirement for it to be mandatory when the director and founder are the same person.
According to the expert, there is a general rule that a written employment contract must be concluded with every employee with whom actual labor relations are established. However, for a director-founder, much depends on the company's charter and the procedure for appointment to the position.
Tajibaev added that the powers of the director arise based on the decision of the founder or founders regarding his appointment. In some cases, the company's charter may contain specific conditions regarding the formalization of relations with the head.
If the founder appoints himself as the director and does not receive a salary, but instead derives profit in the form of dividends, then the decision on the necessity of an employment contract remains with him and depends on the chosen management model.
The expert emphasized that in practice, various scenarios are possible: both the presence of an employment contract with the general director and its absence, provided that this does not contradict the charter and the actual conditions of the company's activities.
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