NEW REGULATION ON TERMINATING AN EMPLOYMENT CONTRACT WITH THE MANAGER OF A LITHUANIAN COMPANY

ECOVIS Miškinis, Kvainauskas ir partneriai advokatų kontora

Lithuania’s Parliament has amended the Law on Companies. Together with other provisions, there was modified the regulation of making and terminating an employment contract with the manager of the company.

According to the provisions of the Law on Companies, an employment contract shall be concluded with the manager of the company. The contract with the manager shall be signed on behalf of the company by the chairman of the board, or by another member authorized by the board (if the board is not formed, by the chairman of the Supervisory Board or another member authorized by the Supervisory Board or, if the Supervisory Board is not formed either, by a person authorized by the General Meeting of Shareholders). There can also be concluded a contract on full material liability with the manager of the company.

Provisions of Lithuanian laws describe the manager of the company as a person to whom higher standards of responsibility and activity in the company are applied; therefore, relations of confidence tie the company and the manager of the company.
The Supreme Court of Lithuania forms the legal practice in a way that the position of the manager of a company shall be treated as unique and, in essence, it matches not the employment legal relations, but civil legal relations. In addition, according to the Civil Code of Lithuania, the responsibility of the manager of the company is unlimited.

(continued in next issue)