When incorporating a limited liability company or other company, together with the position of the company's founder, you acquire the role of shareholder. However, you can also become a shareholder of the company in other ways than by directly participating in its creation – all you have to do is invest part of your assets in the company.
COMPANY SHAREHOLDER AND EXECUTIVE DIRECTOR
The difference between a shareholder and an executive director of a company is mainly in how you can influence the operation of the company. As a shareholder of the company, you can participate in the management of the company through the general meeting and at the same time, all the rights and obligations of a company shareholder apply to you, which are stated in the Business Corporations Act and further addressed in the memorandum of association when the company is established.
The executive director, on the other hand, is significantly involved in the management and operation of the company. This means that he or she represents the company externally and acts on its behalf, is authorized to sign contracts and the like. At the same time, he or she is bound by confidentiality, is obliged to comply with the duty of due managerial care, and is subject to non-compete obligations and prohibition of unfair competition. As a rule, the executive director does not make decisions in fundamental matters – this privilege belongs to the general meeting. If you want to become an executive director in a company in which you are already a shareholder, you must submit a request to the general meeting, which will then select and approve the company's executive director from among the shareholders or other natural persons.
All shareholders are entitled to a share in the company's profit because they have invested their own money in the company.
In addition to the obligation to pay a contribution or the obligation to submit an ordinary share certificate, the shareholder is also obliged to guarantee the company's liabilities up to the amount of his or her unpaid contribution.
The liability of the shareholder up to the amount of his or her unpaid contribution expires upon the payment of the contribution of all shareholders and the subsequent entry of this fact in the Commercial Register. The shareholder's liability expires only upon the payment of the contribution of all shareholders of the company. The shareholder is therefore obliged to guarantee the company's receivables even if he or she has paid his or her contribution, but the other shareholders have not yet done so.
The shareholders are jointly and severally liable for the company's liabilities. In other words, if it is necessary to recover a claim from one of the shareholders, this claim can be recovered from each of them, regardless of whether the person in question has already repaid his or her contribution or not.
The shareholder of a limited liability company or other company in which this function exists is liable for the company's receivables only temporarily and always only up to the amount of unpaid contributions of all shareholders. In other words, the liability of the shareholder of a limited liability company is limited.
EXECUTIVE DIRECTOR'S LIABILITY
If you decide to become an executive director, you will certainly be interested to know about executive liability.
Every member of the company's management who participates in its operation is an executive director. If the executive director acts with due managerial care, as required by law, then he or she is not liable for the company in which he or she acts as an executive director. However, if the company's executive director breaks his or her promise to act with due managerial care and thus causes the collapse and dissolution of the company, the executive director is liable for the company's receivables with all his or her assets.
If you are still thinking about whether it is better to establish a company online or buy a ready-made company or have questions about the liability of members of a company or the company itself, do not hesitate to contact us and we will be happy to help you. We also provide services related to accounting or the establishment of a virtual company seat.