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Messenger The manager’s name must be in the register
Legal entities, in the course of their activities, sign many different contracts with other parties, as this is an important element of any business relationship. However, this process has many hidden problems that business entities are not always aware of.
The full name of the enterprise’s manager must be entered into the Unified State Register
Legal entities, in the course of their activities, sign many different contracts with other parties, as this is an important element of any business relationship. However, this process has many hidden problems that business entities are not always aware of.
Recently this area has undergone a significant number of important changes, most of which are related to innovations in the state registration of natural persons and legal entities – entrepreneurs, as well as the maintenance of the State Register. At the moment, data is entered into the EGR not only about managers, but also about persons who have the right to sign without a power of attorney. In this situation it should be noted that if an employee whose name was entered in the Register was dismissed, and his data was not changed in the EGR, then such a person is considered authorized to sign contracts and agreements, if the counterparty did not know about his dismissal.
In addition, the Civil Code of Ukraine provides for the possibility of limiting a manager’s rights to conclude certain transactions, for example the sale or alienation of property in an amount exceeding 50% of the company’s assets. Such data is also entered into the EGR, so in such cases the buyer would be well advised to inquire about the existence of such a decision.
Regarding data about the manager, there are a number of important nuances. For example, the manager’s full name is entered into the EGR only after his appointment, but the deadlines for this procedure are not specified in the law. It follows that if the information about the manager’s full name entered into the EGR is accurate and official, it can be relied upon on a legitimate basis until changes are made in the EGR and provided the counterparty is unaware of the changes.
If the counterparty was notified of the change of the manager, then even if old data remains in the EGR, one cannot rely on it. According to the resolution of the Higher Commercial Court of Ukraine dated 09.04.2013 in case No. 5009/1050/12, a counterparty does not have the right to sign contracts and agreements with a person if they are aware that the person has been dismissed. In practice, there are cases in which agreements were declared invalid because the counterparty had been notified by letter of the manager’s dismissal.
In other cases, on the basis of the resolution of the Higher Commercial Court of Ukraine dated 09.04.2013 in case No. 5009/1050/12, the counterparty may sign contracts if the manager has not been removed from the EGR, since in that case there is no reason to doubt his legitimacy.
If a party attempts to prove in court that the manager was deprived of his powers, most often the evidence is not taken into account if no changes had been entered into the EGR at the time the contract was concluded.