When does the director lose authority?
| Situation | Check |
|---|---|
| A bankruptcy petition was filed | Filing alone does not terminate authority. |
| Observation | Check for a removal order under Article 69; observation and removal are distinct. |
| External administration | Article 94 ends executive authority; the administrator may dismiss or offer other work under labour rules. |
| Bankruptcy liquidation opened | Article 126(2) ends the director’s authority from the relevant court decision. |
Compare the court order, corporate register and personnel documents. An outdated register entry does not extend authority that has ended. Do not sign new transactions solely because an old extract still names the former director.
Which dismissal ground belongs in the order?
Article 278(1)(1) of the Labour Code concerns removal of a debtor company’s director under insolvency law. Article 278(1)(2) concerns termination by the competent corporate body or owner. These grounds differ: merely writing “bankruptcy” does not identify the legal provision and supporting document.
Article 84.1 requires a termination order, notification to the worker, employment records and final settlement on termination. If the personnel date differs from the end of corporate authority, investigate the discrepancy rather than automatically backdating documents.
Is compensation of three average monthly earnings due?
The Article 279 minimum concerns termination under Article 278(1)(2), without culpable conduct and subject to Labour Code exceptions. It does not arise automatically for insolvency removal under paragraph 1. Also check the employment contract and whether any contractual payment is lawful.
Separate wages, unused-leave compensation and disputed contractual payments. Accrual and actual recovery from the debtor’s assets are different issues. See the guide to employee payments in employer bankruptcy for the claim route.
Hypothetical example: average monthly earnings of ₽120,000 give a three-month amount of ₽360,000. That calculation matters only if the applicable ground and entitlement are established; arithmetic does not prove entitlement.
Handing over company documents and assets
Article 126(2) requires delivery of documentation, seals, stamps and assets to the liquidation administrator within three days of the administrator’s appointment. Do not start that period from receipt of a letter or issue of employment records.
Inventory accounting databases and reports, contracts and source documents, receivables, litigation, personnel and payroll records, seals, keys and physical assets. Transfer access through an agreed secure process; do not expose passwords in a general handover record.
🗂️ Open a handover record outline
Date, place, case and recipient’s authority; transferor and recipient; itemised documents with periods, file counts and media; actual condition; missing items with explanations and location; access delivery method; reservations, signatures and attachments.
If documents are lost or held by someone else, identify them and the steps taken to recover them. “Everything delivered” is not an inventory. Keep the signed record and evidence that handover was offered.
If dismissal is disputed
Collect court orders, the termination order, contract and amendments, calculation, delivery records and handover inventory. Identify separately the disputed wording, date and unpaid sum. Correspondence with the administrator does not replace a timely court claim.
Labour Code Article 392 provides a one-month dismissal-claim period linked to delivery of the order, employment record book or employment activity information on dismissal. Unpaid employment sums have a separate one-year period. Check the relevant trigger and route for each claim.
How does personal bankruptcy differ?
This article concerns an insolvent company. For a citizen’s personal bankruptcy and a later appointment, see being a director after personal bankruptcy. Ending employment does not remove handover duties or automatically determine liability for earlier conduct.
Frequently asked questions
Does a creditor’s petition dismiss the director immediately?
No. Check the stage, order and particular ground for ending authority and employment.
Does every insolvent company director receive three months’ compensation?
No. Article279 is linked to a specified Article278 ground, not every departure.
Can handover wait until employment records are issued?
These duties should not be linked. The Article126 handover period runs from appointment of the liquidation administrator.
Sources and review date
Legal provisions checked on 24 October 2026. Future amendments not yet in force were not applied. Examples are hypothetical.
Reviewing the order, employment paperwork and inventory helps distinguish dismissal disputes, handover obligations and payment claims.
Initial consultation terms →