IP manager as a director in LLC. Manager at IP LLC instead of director

IP and LLC, in essence, are various forms of doing business. Can an individual entrepreneur manage an LLC instead of a director? Yes, today this is already a widespread practice. In the article we will analyze the legislative possibility of such a management, its registration in the documentation, the main advantages and risks of attracting an entrepreneur as a director, other important issues on the topic.

Legislative regulation

Does Russian law allow an IP manager to act as a director in an LLC? Yes, such an opportunity is enshrined in the Federal Law "On Societies ..." No. 14 (1998). In particular, it says that LLCs have the right to attract an entrepreneur or company to work as an executive body of a company.

The basis for such a decision is clause 2.1 of Art. 32, as well as Clause 2, Article 33 of this Federal Law. The decision to attract a manager as president, director, general director of a company or company is made either by the board of directors or by a general meeting of participants and founders. Which option is relevant depends on the provisions of the organization’s charter.

Necessary Requirements

In order to attract a third-party individual as their director, LLC participants must ensure that their organization complies with the following legislative requirements:

The charter of the company must have a clause authorizing the transfer of authority to manage the organization.
Relations with individual entrepreneurs must be supported by an appropriate civil law contract.
The tax structure must be notified in advance of the appearance of a new official who is authorized to act on behalf of the LLC without issuing a power of attorney.
An individual entrepreneur starts managerial activity only after data on his personality are entered into the Unified State Register of Legal Entities. For this, the standard form P14001 is used.

Conclusion of a contract

In order to hire an IP manager as a director of an LLC, it is necessary to conclude a civil law contract with this person. The conditions for attracting a manager are determined by the participants of the company when deciding on the invitation of the director.

In accordance with paragraph 3 of Art. 42 of the Federal Law No. 14 on the part of the company, the contract (the IP manager as the director of the LLC is determined thanks to this document) is signed by the following persons:

The chairman of the general meeting of members of the company - the one at which it was decided to transfer all the functions of the director of the LLC to the managing person, and the terms of the contract with this individual entrepreneur were approved.
Another authorized participant of the LLC, which was granted powers by decision of the general meeting of members of the company.
Chairman of the Board of Directors. But only if, according to the charter of the LLC, questions on attracting a manager instead of a director fall within the competence of this official.

Accordingly, the IP manager, as the director of the LLC, acquires rights and obligations only from the moment of signing such an agreement and approval of the minutes of the general meeting.

Managing Director of IP as Director at Risk LLC

Contract process

If the members of the company decide to involve the IP as manager, they need to do the following:

Check the provisions of your charter. In an LLC with an IP manager, instead of the director, the possibility of transferring the powers of the executive sole body to this person should be allocated. If such a possibility is not indicated in the charter, then the first thing to do is to amend it.
Decide on the relationship of authority to approve the terms of the contract with the future manager.It can be both in the environment of conducting the general meeting of members of the company, and in the environment of the board of directors of the company.
To hold a general meeting of participants (in another case, a meeting of the board of directors) to approve the terms of a civil law contract with the manager involved.
Signing a contract. On the part of the LLC, the document may be authorized by an authorized person selected by the meeting, the presiding participant.
Make the necessary adjustments to the information about your organization in the register. In the section on the executive, sole governing body.
Provide copies of the necessary documentation to banks and / or other organizations serving the LLC.

Contract execution

Domestic legislation does not introduce any standard form of an agreement with an IP-manager. Of course, the document must be in writing. It should also indicate the following:

Details of the parties to the agreement. Accordingly, the entrepreneur here acts as the executor, and LLC as the customer.
List of manager powers.
The rights and obligations of both the customer and the contractor.
The procedure for the formation of remuneration for the activities of the manager.
Duration of the contract. It can be any at the request of the parties.

Features of the activity

Here is a brief overview of the features of the LLC, where the director is the invited manager:

The ability to optimize the taxation of legal entities. For example, an LLC may not pay premiums for a director.
IP itself can switch to a more favorable tax regime - USN. Also in the role of manager, he pays contributions to extrabudgetary funds at fixed rates. Which in fact are lower than those deducted from the salary of ordinary workers.
Based on the results of its activities in LLC, the entrepreneur pays an annual 6% tax.
Amounts paid by the LLC as a reward to its invited manager are recorded in the company's expense column.
In order to minimize the risk of claims from the control system regarding the amount of remuneration of the invited director, the latter should regularly submit reports on his work.

Solution Benefits

Why, then, are LLC participants increasingly choosing in practice to engage an outside party as their director? The point is the indisputable practical advantages of such a solution:

Possible savings that can be used to pay taxes. What is the advantage here to attract the manager of an LLC as an IP director? As a tax agent, the company would pay 13% of the income of its director employee. And if the IP-manager is, for example, on the simplified tax system, then from his profit as a director, he is required by law to pay only 6% of taxes to the treasury.
Savings on mandatory payments to extrabudgetary funds. When a civil contract with an individual entrepreneur is concluded, the company does not acquire the obligation to make these contributions. But at the conclusion of an employment contract with its employees, the organization undertakes to pay about 30% of the income of each of them to extrabudgetary funds - pension, medical, social.
The manager in this case bears full responsibility for non-performance / improper performance of the provisions of the contract concluded with him. In particular, he acquires the obligation to compensate for lost profits, damage, must pay forfeits.
The company is authorized to establish procedures for the payment of remuneration for labor to its manager, which may be different from the requirements of the labor legislation of the Russian Federation. For example, to tie his income to the results of the financial and economic activities of the organization, to establish convenient terms and periods for paying salaries, etc.

charter of llc with managing director instead of director

Decision Risks

The company attracts an IP manager as a director in an LLC. The risks of making such a decision may be as follows:

The likelihood of being held legally administratively liable due to the actions of a manager who improperly performs his own duties.
The possibility of recognition of civil law relations with individual labor with all the ensuing consequences. In particular, it is determined by the decision of the Supreme Arbitration Court "On review by way of supervision ..." This is document No. ВАС-14349/12 (2012). The basis may be the following: the work schedule of such a manager is close to the work schedule of other employees, there are no visible actions to manage the company, etc.

Grounds for the re-qualification of the contract with the director

It may be that the managing director-IP as the director of the LLC spells out in the charter. But in practice, this person has the right to demand the re-qualification of a civil law contract with him in an employment contract. The initiative may also come from the tax office, the Pension Fund.

However, for such a retraining, several conditions must be met. By a decision of the Supreme Arbitration Court No. VAS-14349/12 (2012) they are as follows:

The coincidence of the work schedule with the work schedule of other employees of the company.
The lack of activity of this person as an individual entrepreneur. For example, he does not submit reports, does not independently submit tax documents on his business activities.
The rights and obligations of the official who previously held the post of director of this company, with the involvement of the manager, remained the same.
LLC is in fact the only counterparty of this entrepreneur.

managing director in ooo ip instead of director

Management Company

An IP manager in an LLC instead of a director is one of the options allowed by law. The second is the involvement of a management company. However, such a commercial company must have certain specific features. Of course, an individual entrepreneur here cannot act as a management company, since it does not have the characteristics of a legal entity.

The management scheme with the involvement of the management company is more relevant in companies included in a single holding. It allows you to unify management policy. Information about the management companies is reflected in the Unified State Register of Legal Entities. When signing an agreement with the Criminal Code, all responsibility associated with the management of the LLC passes entirely to it.

If we compare it with the responsibility of the manager-SP, as a director in the LLC, then the decision to attract the management company has the following advantages:

Savings on the payment of salaries or remuneration under a civil contract to the director.
Reducing financial risks, which, one way or another, may be associated with incompetent, erroneous, mercenary decisions of the invited manager.

Thus, in many Russian LLCs the functions of a director are performed by an IP manager. The invitation of the director is legal, has its own characteristics, advantages, but also fraught with certain risks.