Liability of officials of business associations

Authors

DOI:

https://doi.org/10.31617/3.2023(127)07

Keywords:

corporate responsibility, limited liability company, fairness, compensation of damages.

Abstract

Introduction. The organizational and legal form of a limited liability company (LLC) makes it possible to form a flexible and effective system of corporate management, to ensure and control the receipt of income and the exercise of the will of the members of the LLC by officials. 

Problem. The determination of the legal status of the executive body members of the limited liability company (LLC) as well as their responsi­bility for their management of the company remains insufficiently researched from the point of view of the participation of companies in civil and other relations and requires the study of the sectoral affiliation of the responsibility of executive body members.

The aim of the article is to determine, based on the analysis of Ukrainian legislation and the practice of its application, the legal nature of the executive body members’ liability in limited liability company (LLC); as well as the conditions under which they may be held liable for mismanagement.

Methods. The philosophical (dialectical), general scientific (analysis and synthesis, systemic-structural, modeling, abstraction, formal-logical) methods as well as special methods of cognition used in jurisprudence (methods of interpretation of legal norms, legal-dogmatic, comparative-legal), etc. are applied.  

Results. It’s substantiated that the executive body members, when performing the duties assigned to them, should act in the interests of the limited liability company members, the company itself and its creditors. In case of provisions of the legislation and the statute violation as well as in case of improper performance of their official duties, the members of the executive body bear corporate responsibility, which has a civil law nature.

Conclusions. If the actions of the executive body members contain a civil offense, they must bear civil liability. The culpability of the relevant official action (action or inaction) and other conditions of certain type legal responsibility must be proven, in particular, the cause-and-effect relationship between the illegal behavior of the responsible person and the existing losses of the company.

Author Biography

Petro PALCHUK, State University of Trade and Economics

PhD (Law), Associate Professor, Associate Professor of the Department of International, Civil and Commercial Law

References

Kil'kist' zarejestrovanyh jurydychnyh osib za organizacijno-pravovymy formamy gospodarjuvannja stanom na 01.04.2022 [The number of registered legal entities by organizational and legal forms of business as of April 1, 2022]. http://www.ukrstat.gov.ua/edrpoy/ukr/EDRPU_2022/ks_opfg/arh_ks_opfg_22.htm. (data zvernennja 12.01.2023) [in Ukrainian].

Il'chenko, G. (2019). Mizhnarodno-pravove reguljuvannja stvorennja kompanij u SShA [International legal regulation of the establishment of companies in the USA]. Zovnishnja torgivlja: ekonomika, finansy, pravo – Foreign trade: economy, finance, law, 1, 58-68 [in Ukrainian].

Borysova, V. I. (2017). Organ korporacii' jak instytucional'no-funkcional'nyj i'i' predstavnyk [The body of the corporation as its institutional and functional representative]. Korporatyvne pravo Ukrai'ny ta jevropejs'kyh krai'n : pytannja teorii' ta praktyky: Zbirnyk naukovyh prac' za materialamy HV Mizhnarodnoi' naukovo-praktychnoi' konferencii' – Corporate law of Ukraine and European countries: issues of theory and practice: Collection of scientific works based on the materials of the 15th International Scientific and Practical Conference. NDI pryvatnogo prava i pidpryjemnyctva im. akademika F.G. Burchaka NAPrN Ukrai'ny, za red. d-r. juryd. nauk, akad. NAPrN Ukrai'ny V. V. Lucja. Ivano-Frankivs'k, (pp. 36-39) [in Ukrainian].

Vasyl'jeva, V. A., Luc', V. V., Sishhuk, L. V. (et al.). (2020). Naukovo-praktychnyj komentar Zakonu Ukrai'ny «Pro tovarystva z obmezhenoju ta dodatkovoju vidpovidal'nistju» [Scientific and practical commentary on the Law of Ukraine «On Limited and Additional Liability Companies»]. Harkiv: Pravo [in Ukrainian].

Kologojda, O. V. (2016). Okremi aspekty korporatyvnoi' vidpovidal'nosti osib, shho zdijsnjujut' upravlinnja akcionernym tovarystvom [Certain aspects of corporate responsibility of persons managing a joint-stock company]. Pravo i suspil'stvo – Law and society, 4, 47-53 [in Ukrainian].

Mel'nychenko, R. V. (2022). Zapobigannja zlovzhyvannju konstrukcijeju «znachnyh pravochyniv» i «pravochyniv iz zainteresovanistju» [Prevention of abuse of the construction of «significant transactions» and «transactions with interest»]. Zovnishnja torgivlja: ekonomika, finansy, pravo – Foreign trade: economy, finance, law, 1, 53-63 [in Ukrainian].

Prokopjuk, A. (2020). Ponjattja ta oznaky korporatyvnoi' vidpovidal'nosti [Concepts and signs of corporate responsibility]. Pidpryjemnyctvo, gospodarstvo i pravo – Entrepreneurship, economy and law, 9, 75-81 [in Ukrainian].

Spasybo-Fatjejeva, I. (2008). Dejaki aspekty vyrishennja korporatyvnyh sporiv: spivvidnoshennja cyvilistychnogo ta trudovogo reguljuvannja [Some aspects of corporate dispute resolution: the relationship between civil and labor regulation]. Jurydychnyj radnyk – Legal advisor, 3, 6-11 [in Ukrainian].

Spasybo-Fatjejeva, I. V. (2017). Pro vidpovidal'nist' v korporatyvnyh vidnosynah [About responsibility in corporate relations]. Korporatyvne pravo Ukrai'ny ta jevropejs'kyh krai'n: pytannja teorii' ta praktyky. Zbirnyk naukovyh prac' za materialamy HV Mizhnarodnoi' naukovo-praktychnoi' konferencii' – Corporate law of Ukraine and European countries: issues of theory and practice. A collection of scientific works based on the materials of the XV International Scientific and Practical Conference (6-7 zhovtnja 2017 r. m Ivano-Frankivs'k) / NDI pryvatnogo prava i pidpryjemnyctva im. akademika F. G. Burchaka NAPrN Ukrai'ny; za red. d r. juryd. nauk, akad. NAPrN Ukrai'ny V.V. Lucja. Ivano-Frankivs'k, (pp. 229-233) [in Ukrainian].

Symonjan, Ju. Ju. (2011). Oznaky ta osoblyvosti vidpovidal'nosti za pravo-porushennja u sferi korporatyvnyh vidnosyn [Signs and features of liability for offenses in the field of corporate relations]. Aktual'ni problemy derzhavy i prava – Actual problems of the state and law. (Issue 59), (pp. 387-392) [in Ukrainian].

Postanova Velykoi' Palaty Verhovnogo Sudu vid 08.10.2019 roku u spravi № 916/2084/17 provadzhennja № 12-77gs19 [Resolution of the Grand Chamber of the Supreme Court of October 8, 2019 in case № 916/2084/17 proceedings № 12-77gs19]. https://reyestr.court.gov.ua/Review/84911545 (data zvernennja 12.01.2023) [in Ukrainian].

Cyvil'nyj kodeks Ukrai'ny vid 16.01.2003 r. [Civil Code of Ukraine dated January 16, 2003]. http://zakon4.rada.gov.ua/laws/show/435-15 (data zvernennja 12.01.2023) [in Ukrainian].

Gospodars'kyj kodeks Ukrai'ny vid 16.01.2003 r. [Economic Code of Ukraine dated January 16, 2003]. http://zakon4.rada.gov.ua/laws/show/436-15 (data zvernennja 12.01.2023) [in Ukrainian].

Pro tovarystva z obmezhenoju vidpovidal'nistju ta dodatkovoju vidpovidal'nistju: Zakon Ukrai'ny vid 06.12.2018 r. № 2275-VIII. [On limited liability and additional liability companies: Law of Ukraine dated December 6, 2018 № 2275-VIII]. http://zakon2.rada.gov.ua/laws/show/2275-19 (data zvernennja 12.01.2023) [in Ukrainian].

Krupchana, O. D. & Romovs'ka, Z. V. (2021). Metodologichni pytannja pryvatnogo prava [Methodological issues of private law], Kyi'v, (P. 1) [in Ukrainian].

Kryminal'nyj kodeks Ukrai'ny vid 05.04.2001 [Criminal Code of Ukraine dated April 5, 2001]. https://zakon.rada.gov.ua/laws/show/2341-14#n14 (data zvernennja 12.01.2023) [in Ukrainian].

Postanova Velykoi' Palaty Verhovnogo Sudu vid 03.12.2019 roku u spravi №904/10956/16, provadzhennja 12-90gs19 [Resolution of the Grand Chamber of the Supreme Court dated of December 3, 2019 in case № 904/10956/16, proceedings 12-90gs19]. https://reyestr.court.gov.ua/Review/86241670 (data zvernennja 12.01.2023) [in Ukrainian].

Postanova Velykoi' Palaty Verhovnogo Sudu vid 22.10.2019 u spravi №911/2129/17 provadzhennja 12-45gs19 [Resolution of the Grand Chamber of the Supreme Court dated of October 22, 2019 in case №911/2129/17, proceedings 12-45gs19]. https://reyestr.court.gov.ua/Review/86333853. (data zvernennja 12.01.2023) [in Ukrainian].

Postanova Velykoi' palaty Verhovnogo Sudu vid 26.11.2019 r. u spravi 910/20261/16 provadzhennja № 12-118gs19 [Resolution of the Grand Chamber of the Supreme Court dated November 26, 2019 in case 910/20261/16, proceedings № 12-118gs19]. http://reyestr.court.gov.ua/Review/86333859 (data zvernennja 12.01.2023) [in Ukrainian].

Postanova Verhovnogo Sudu vid 24.02.2021 r. u spravi № 904/982/19 [Resolution of the Supreme Court dated February 24, 2021 in the case № 904/982/19]. https://reyestr.court.gov.ua/Review/95240657 (data zvernennja 12.01.2023) [in Ukrainian].

Gospodars'kyj procesual'nyj kodeks Ukrai'ny vid 06.11.1991 r. [Economic Procedural Code of Ukraine dated November 6, 1991]. http://zakon4.rada.gov.ua/laws/show/1798-12. (data zvernennja 12.01.2023) [in Ukrainian].

Published

2023-04-21

How to Cite

PALCHUK П. (2023). Liability of officials of business associations. oreign rade: onomics, inance, aw, 127(2), 98–112. https://doi.org/10.31617/3.2023(127)07

Issue

Section

PUBLIC AND PRIVATE LAW