Головна Analytics and judicial practice Analitics How to check jurisdiction of the head of economic entity.
How to check jurisdiction of the head of economic entity.
Analitics and judicial practice - Analitics

Issues related to validation of competence of the person who represents the business entity is always relevant to judicial practice. Lack of head necessary authorities in the implementation of certain legal actions, errors in their design significantly affect the resolution of litigation. Recently, the relevance of such cases has increased considerably in the context of strengthening the fight against corporate raids, especially against illegitimate purpose of management and their unlawful actions. In considering such cases should also take into account changes in the legislation for which appropriately may vary, and evaluation of documents submitted by the parties.

The subject of the trial of a leader are both in material and legal relations (to conclude and sign treaties, publication orders, etc.) and in the procedural law relationship (litigation, signing the legal documents, etc.). Errors members of business and legal and civil relations in assessing the competence and capacity of its partners may result in the recognition of signed contracts, agreements null and void, prevent their execution, lead to other negative consequences, including tax.
Most modern authors examine the concept of "authority" and "competence" as identical or a similar concept. Without going into theoretical exploration of this question and revealing selected topic will also proceed from the common provisions of legal doctrine.
Opening theme should first determine which law governed the establishment and scope of authority (jurisdiction) of legal body-business entity.
In general, the Civil Code of Ukraine (CCU) and the Commercial Code of Ukraine (Consulate General) does not contain innovations in approaches to issues related to the competence of legal persons. Thus, CCU article 92 these issues are considered in the context of civil capacity of legal entity, i.e., the ability to acquire and exercise civil rights and obligations. Legal person acquires civic rights and responsibilities and carries them through their bodies, acting pursuant to statutory documents and the law. In the cases established by law, a legal person may acquire civil rights and responsibilities and implement them through its members. In relations with third parties to limit the powers of representation of the legal person has no legal effect unless the legal person proves that the third person knew or in all circumstances could not know about such restrictions.
So, the question arises which is party documents, and if a dispute arises and the court should examine the competence of the head.
In Part 2 article 207 CCU found that transaction, which commits a legal entity, signed by persons authorized by it:
•    constituent documents
•    proxy
•    law
•    other acts of civil legislation.
In article 65 Consulate General of the issues expected following. Enterprise management is carried out in accordance with its constituent documents through a combination of owner's rights to economic use of his property and participation in managing the workforce. Owner shall exercise its rights with respect to management directly or through its authorized bodies in accordance with the Company Charter or other founding documents. Head of the company without the commission acts on behalf of the company, represent its interests in state authorities and local governments, other organizations, to deal with legal entities and citizens, forms of enterprise administration and resolve issues within the enterprise and manner determined by instruments.
It should also cite specific provisions article 44 Law of Ukraine "On Notary" governing the review of civil legal capacity of legal persons, the credentials of representatives person or entity.
When checking the civil legal capacity of legal entity notary must see the constituent documents, a certificate of registration and an extract from the Unified State Register of legal entities and natural persons - entrepreneurs of the legal person and check whether the notarial act which is committed, the volume of its Civil legal capacity.
According to Article 17 of the Law of Ukraine "On state registration of legal entities and individuals Entrepreneurs in the Uniform State Register by the recording based on information from the relevant registration cards included among others the following particulars:
•    information controls the legal person;
•    full name, date of appointment (election) and identification numbers of natural persons - taxpayers who elected (appointed) to the management entity, authorized to represent in legal entity of third parties or persons who may carry out actions on behalf of legal person without a warrant, including sign agreements;
•    data availability restrictions on representation on behalf of entity.
Thus, when signing the contract or any other legal action by representatives of the parties or managers who perform the representative functions should present the document (any of the following) that prove their credentials:
• Certified extracts with the statute (other constituent documents), where some official (Director, president, etc.) are fixed the respective powers
• Excerpt Unified State Register of Legal Entities and Individual Entrepreneurs (Part 2 Article 17 of the Law on State Registration of Legal Entities and Individual Entrepreneurs ")
• Act or other acts of civil legislation containing relevant provisions
• Power of Attorney.
Attention should be paid to the provisions of article 18 Law "On state registration of legal entities and individual entrepreneurs.
If the information subject to inclusion of the Unified State Register, were made to him, such data are considered reliable and can be used in a dispute with a third party as long as they do not adjust. If the information subject to inclusion of the Unified State Register, is unreliable and were made to him, a third party may refer the dispute to them as authentic. Third person may not refer to them in the dispute if it knew or should have known that such information is unreliable. If the information subject to inclusion of the Unified State Register, were made to it, they can not be used in a dispute with a third party unless the third person knew or should have known this information.
According to legal doctrine adopted in classification the above provisions of law should be attributed to negative legal presumptions, i.e. those that can be deny in court.
Representing subject of economic activity, as procedural function during the trial.
Representing as procedural function during the trial only mentioned in some articles Consulate General, for example, in Part 5 of Article 21 referred to the legitimate interests of employers, who can carry them on Unity. According to CCU p.3 article 237 rise to the establishment regulated by civil legislation. However, we are talking about in the context of the substantive (civil law) relationship. In practice and in theory there are questions about representation in the procedural law relationship, i.e. in court (legal representation). V.E. Belyanevych notes in this regard: "We can not think of the representation that the entity represented by its authorities. Authorities do not have special legal status and procedural act within the powers granted to them by law and instruments. The Authority maintains a legal entity in the commercial court proceedings without a warrant on the basis of their competence "
Commercial Procedural Code of Ukraine (CPC) does not define the concept of litigation. Instead, this definition can be found in the decision of the Constitutional Court of Ukraine of 08.04.1999. It is noted that by legal representation in court are the relationships in which one person (agent) on the basis of certain powers on behalf of another person (the principal) and performs in court proceedings in its interests, acquiring (changing, still) for her rights and obligations determined. Characteristically, within the meaning of Article 28 CPC managers considered it in court as representatives of relevant enterprises and organizations.


Considerable interest is in litigation disputes coupled with the definition of competence manager based on information from Unified State Register (Next USR).
Thus, in ruling the Supreme Economic Court of Ukraine (SECU) from 01.28.2010 № 17/218/09 the case was considered such a situation. The point was the absence of According to defendant, in S. citizen authority to sign the statement of claim, as a director. According to minutes of general meeting of the founders of the Society S. citizen appointed (elected) Director for the period from 01.03.2008 to 31.12.2008. According to previous courts this manager had no authority to sign the statement of claim, as his powers as director ended 01.01.2009.                    
However, such conclusions SECU disagreed and said the following. In case file no evidence that S. citizen has been eliminated competent authority of his duties as director of the Company and the other was elected director. Powers of officers of the company terminated their reelection, (p.41 Supreme Court of Ukraine of 24.10.2008, № 13 "On the practice of handling corporate disputes"). Moreover SECU took note of copies of extracts from the Unified State Register of legal entities and individuals Entrepreneurs, of which it appears that as of 12.05.2009, on 27.07.2009 and on 10.07.2009 (date of controversial statements) only official head of the plaintiff in as director is a citizen of S. and that it is entitled to represent the interests of the plaintiff without the order and any restrictions.
No significant change involved the use of litigation article 241 CCU. Until recently, this provision of this article served as protection for contracts concluded in excess of authority. It provides that transaction is committed representative of abuse of authority, creates, modifies, terminates the civil rights and obligations of a person whom he represents, only in case of subsequent approval of the transaction that person. Transaction deemed to be approved especially if the person he represents, committed acts that indicate the decision to his execution.
In the context of considerable interest is the decision of 01.13.2010 SECU the case № 32/572. Subject dispute was plaintiff's claim to recognize the agreements reached between the plaintiff and defendant, void; cause of action is an abuse of authority Chairman of the Supervisory Board, who signed contracts impugned by the plaintiff because the plaintiff neither statute nor the statute of the Supervisory Board of the plaintiff, it granted the appropriate authority for the commission of such acts by the bank.
Abolishing judgment, said SECU - of system analysis CCU regulations article 241 can be concluded that excess agent its authority in committing the transaction is not an unconditional basis for invalidation of the transaction in court if further approval by the person on whose behalf the representative acted. In the study circumstances of the plaintiff pay for controversial contract of sale must reliably determine that payment plaintiff funds for this contract was conducted on behalf of the Plenipotentiary official plaintiff. Addressing this issue directly affects the solution of other important questions, namely: whether there has been a plaintiff approval of the transaction (purchase agreement) done on behalf of the President Supervisory Board and the claimant to resolve the dispute in accordance with law. That is, SECU raised the need for checking the availability of relevant authorities in the person who approved their actions under the controversial transaction article 241 CCU.
Other aspects of these issues will be discussed in subsequent publications.

Sergei Tenkov
Doctor of Philosophy in Law