Projected changes in terms of the terms of office of the bodies of a limited liability company and a joint-stock company

The draft act prepared by the Ministry of State Assets to amend the Code of Commercial Companies and certain other acts introduces significant changes to the terms of office of the bodies of a limited liability company and a joint-stock company.

In relation to the limited liability company it is proposed to adopt the following provisions:

a) the term of office of the management board is calculated in full financial years, unless the articles of association provide otherwise,

b) the term of office of the supervisory board or audit committee shall be calculated in full financial years, unless the articles of association provide otherwise.

With regard to a joint-stock company, it is proposed to adopt regulations according to which:

a) a member of the management board is appointed for a period not longer than five years (term of office),

b) unless the statute provides otherwise, the term of office of the management board shall be calculated in full financial years,

c) reappointment of the same person as a member of the management board is allowed, but not earlier than one year before the end of the current term of office

It follows from the above that the project initiator plans to introduce the principle of calculating the term of office in financial years, and not from the moment of appointment of the supervisor, as is the case so far, which should generally be assessed positively.