Simultaneous performance of functions in commercial corporation

One of the most discussed topic with regard to the recodification of the civil law is so called “concurrence of functions” – simultaneous performance of functions in commercial corporation when one person is a statutory body in commercial corporation and simultaneously an employee (in most cases with scope of work of general director).

We hold the view that this concurrence of functions is in conformity with current legal regulation, namely for this following reasons:

1)    What the law does not expressly prohibit, it is allowed.

2)    The legal regulations – provision § 61 Sec. 3 of the Act on Commercial Corporations enables the concurrence of functions when this concurrence is in the provision explicitly set.

3)    In case of concurrence of functions in the employment contract cannot be agreed a conduct of business management as a scope of work. This matter nevertheless does not exclude the possibility to conclude the employment agreement with the employee (simultaneously in function of statutory body) with a different scope of work. As this different scope of work may be also stipulated a “general director” who does not perform a conduct of business management. Contrarily the opinion that the position of general director always involves a conduct of business management cannot be accepted because in such a case it would not be generally possible to conclude an employment agreement with scope of work of general director with anyone if only statutory body can perform a conduct of business management.

4)    The concurrence of functions was permissible till 31.12.2013. There is no legal solution what happens with the existing employment relationship or function of statutory body. The employment relationship can be terminated only in the way anticipated in the Labour Code and only on the grounds there regulated.