Is an Employment Contract Necessary for a Director-Founder? Experts Clarify the Nuances

Владислав Вислоцкий Exclusive
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Tax lawyer Kanybek Cherikov held a discussion on the "Aysalyk" platform with his colleague in labor law, Eldar Tajibaev, on a topic that concerns accountants and tax specialists: is it mandatory to conclude an employment contract with a director who also acts as the sole founder of the company.

Tajibaev noted that current labor legislation lacks both prohibitions and mandatory requirements in this regard, especially in cases where the director and founder coincide.
He explained that there is a general rule stating that a written employment contract must be signed with each employee with whom real labor relations are established. However, in the case of a director-founder, much depends on the internal charter and the procedure for appointing the director.

The expert added that the director's powers arise based on the decision of the founder or founders regarding their appointment. In some cases, the charters of companies may specify particular rules for formalizing relationships with management.

If the founder appoints themselves as the director and does not receive a salary, instead earning through dividends, the question of the necessity of an employment contract remains at their discretion and depends on the management model they choose.

Tajibaev emphasized that in practice, there are various approaches: it is possible to either formalize an employment contract with the general director or do without it, provided this is in accordance with the charter and the actual activities of the company.
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