A Critical Analysis of the Rights and Obligations of the Manager of a Limited Liability Company: Managerial Legislative Basis

Abstract

The rights and obligations of an executive as a top manager of a limited liability company seem to be a long-settled question. However, the opposite is true. We were particularly interested in the question of the rights and obligations of the manager as a statutory body of the most widespread type of business company. A very important issue is the definition of the relationship between the limited liability company and the manager. The reason for this is the fact that it is a business–legal relationship and the protection provided to the executive in relation to the business company is based only on their mutual contractual basis. In addition to the examination of managerial knowledge and skills, we focused primarily on a critical analysis of the legal definition of the rights and obligations of an executive and their responsibility towards a limited liability company. As part of our research, we analyzed extensive jurisprudence, which completed our understanding of the concept of an executive and also defined the framework of not only their actions, but especially their rights and obligations. To achieve our goal, we used several scientific methods designed for the study of law, such as analysis, synthesis, comparison, deduction, and description. We critically evaluated the results of our research and compared the development of Slovak and Czech jurisprudence in the context of its influence on the investigated issue. At the same time, we answered the research question of whether legislative intervention is necessary for the already existing rights and obligations of a manager in relation to their limited liability company. This analysis of the rights and obligations of the manager of a limited liability company has several implications for both managers and companies as a whole, such as managerial autonomy, accountability, responsibility, and the balance of power. The research findings highlighted the significant decision making authority granted to managers. The obligations identified in the analysis emphasized the need for managers to act responsibly and be accountable for their actions. The rights and obligations of managers need to be balanced with the interests of other stakeholders, particularly the company’s members. In conclusion, the critical analysis of the rights and obligations of the manager of a limited liability company, based on the managerial legislative basis, revealed that managers possess decision making authority, profit distribution rights, limited liability protection, and entitlement to compensation. However, they are also obligated to fulfill fiduciary duties, comply with laws and regulations, maintain proper records, and exercise due care. The research underscored the significance of managerial autonomy, accountability, and a balanced exercise of power in a limited liability company. By understanding and adhering to their rights and obligations, managers can effectively navigate their roles while contributing to the success and sustainability of the company.