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

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- At the "Aysalyk" site, tax lawyer Kanybek Cherikov discussed a relevant issue with labor law expert Eldar Tajibaev regarding the necessity of concluding an employment contract with a director who simultaneously serves as the sole founder of the organization.

Tajibaev noted that there is no clear prohibition in labor legislation against entering into an employment contract with a general director, nor is there a strict norm requiring this in situations where the director and founder are the same person.

“There is a general rule: a written employment contract must be signed with every employee with whom there are indeed labor relations. However, in the case of a director-founder, much depends on the company's charter and the procedure for appointing the director,” he explained.

According to the expert, the powers of the director are formed based on the decision of the founder(s) to appoint them to this position. In some cases, the company's charter may contain specific conditions regarding the formalization of labor relations with the director.

If the founder appoints themselves as the director and does not receive a salary, but earns income through dividends, the decision to conclude an employment contract remains with them and depends on the management model they have chosen.

The expert emphasized that in real practice, various approaches are possible — both having an employment contract with the general director and not having one, provided that it does not contradict the charter and the actual circumstances of the company's operation.
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