Appointment of the administrator of a company / Revocation of the administrator (for reasons attributable or not) / Damages for untimely and/or unjustified revocation / How we can help you
Appointment of the administrator of a company
A company exercises its will (e.g. concludes contracts, participates in tenders, etc.) in its relations with third parties (e.g. customers, suppliers, partners, authorities) through its management bodies.
The management bodies of a company can be: the sole director/directors of the company (in the case of limited liability companies), the board of directors, the managing director/management board under the supervision of the supervisory board (in the case of public limited liability companies).
The election and appointment of the director(s) of a company is a matter for the governing bodies (e.g. sole shareholder, general meeting of shareholders, ordinary general meeting of shareholders).
The appointment of the administrator is made at a meeting of the general meeting of members/shareholders and is embodied in the resolution adopted.
As a general rule, any type of company may at any time appoint or change directors.
The appointment of new directors is also an amendment to the company’s articles of association (e.g. memorandum of association), in which case an updated memorandum of association must be drawn up and registered with the commercial register.
For more information on commercial register registrations please visit the section Registering in the commercial register.
Revocation of the administrator (for reasons attributable or not)
As a general rule, the legal relationship between a company and its directors is based on the existence of a mandate contract.
The mandate contract, by its very nature, may be terminated by revocation by the company.
According to the law, the company may, at any time, revoke all or part of its directors and appoint new directors.
The possibility of dismissal of directors is absolute (it cannot be prevented by any contractual clause) and discretionary (it is left exclusively to the discretion of the general meeting of shareholders).
In other words, the company may at any time dismiss its own directors, regardless of whether or not there are good reasons (e.g. failure to perform the duties laid down by law, failure to meet performance indicators, conclusion of contracts detrimental to the company, etc.).
Like the appointment, the revocation of the directors is also decided by the general meeting of shareholders and is embodied in the resolution adopted.
The resolution adopted by the general meeting of the associates/shareholders is final and enforceable and cannot be challenged in court by the revoked administrator.
Damages for untimely and/or unfair dismissal
Although revocation can occur at any time, it must still respect the requirements of good faith.
Although the mandate contract ends with the revocation, and from the moment of revocation the director’s capacity ceases, the director has the right to claim damages from the company if his revocation was untimely and/or without just cause (a good reason).
In other words, although the revoked administrator does not have the right to challenge the decision by which he was revoked (with a view to reinstatement), he is entitled to obtain compensation for the damage caused by the revocation.
Damages are usually fixed in advance, directly by the mandate contract concluded at the beginning between the company and the administrator.
How we can help you
Our lawyers can provide you with legal advice, legal assistance and representation on any issue related to the relationship between the company and the directors:
- drawing up the corporate documents relating to the appointment of new directors;
- assistance at the AGM to appoint new directors;
- drawing up mandate contracts;
- registration of new administrators with the trade register;
- legal assistance and representation in a court case concerning the payment of damages for wrongful and/or unjustified dismissal.
Additional information on the appointment and removal of the administrator