In practice, there are often situations when the general director is the only founder. At the stage of development of a company, you always want to save money, including on paying yourself a salary and “salary” taxes, as well as by drawing up zero reporting, so as not to spend money on complex accounting.
But if you pay wages even at the “minimum wage” (in Moscow - 16,500 rubles), then taking into account income tax and contributions to the “salary” funds, the costs will be about 23,500 rubles. For many at the stage of business formation, even this amount is quite significant. In addition, when calculating salaries, there can be no talk of any “zero” reporting - reporting will have to be prepared, not only for the Federal Tax Service, but also for funds (FSS and Pension Fund). And this will lead to additional financial costs.
In this regard, the question arises: does the sole founder, who is the CEO, need to enter into an employment contract and pay himself a salary, or can this be somehow done without?
Let's start with the fact that the legislation of the Russian Federation does not provide for any clause or article that directly states that the sole founder-general director is allowed not to pay a salary. However, the legislation does not contain a rule obliging it to be paid. All justifications for the possibility of not paying wages are based on the interpretation of legal norms and explanatory letters from departments.
Let's figure it out.
Do you need an employment contract?
Let's turn to chapter 43 Labor Code RF “Features of labor regulation of the head of the organization and members of the collegial executive body organizations."According to Article 273 of the Labor Code of the Russian Federation, the provisions of the chapter apply to the heads of organizations, regardless of their organizational and legal forms and forms of ownership, with the exception of those cases when the head of the organization is the only participant (founder).
That is, the law directly states: if the manager is the only founder, then the labor regulations of the head of the organization do not apply to him. Including the provisions of Article 275 of the Labor Code of the Russian Federation on concluding an employment contract with a manager.
It is not very clear what to do with signing an employment contract. In the case where the founder and the manager are the same person, it turns out that the general director will have to enter into an employment contract with himself. Indeed, in this case, the signatures on the part of the employer and on the part of the employee will be the same.
Explanations for this situation are provided by Rostrud in letter dated 03/06/2013 No. 177-6-1. And this is how officials reason.
An employment contract is a bilateral agreement between an employee and an employer. Each party to the contract assumes certain obligations. The employee is obliged to fulfill labor functions in accordance with the established procedure. The employer must provide appropriate working conditions. If one of the parties is absent, the contract cannot be concluded. Therefore, if the founder and manager are the same person, there is no need to conclude an employment contract.
The possibility of not concluding an employment contract was confirmed by the Ministry of Finance of Russia in its letter dated February 19, 2015 No. 03-11-06/2/7790. The department also believes that the director cannot sign an employment contract with himself. And since there is no contract, then there are no grounds for paying wages.
In our opinion, there cannot be a violation of the law in the fact that the general director works, but there is no employment contract, since the duties of the director are one thing, and labor relations with employee- another. The General Director is obliged to act on behalf of the organization on the basis of the Charter; for this he does not have to enter into an employment relationship with his company.
In our opinion, the absence of an employment contract is the most safe way avoid paying salaries to the director.
Thus, labor relations that involve the payment of wages are not necessary for the general director to perform his functions as a sole executive body. The general director can perform his functions on the basis of the order on taking office and the Charter.
If the general director is the only founder, he is not obliged to enter into an employment contract with his company, obliging himself to perform labor functions and comply with internal rules labor regulations. He can perform all his functions as a sole executive body at any time, without limiting himself to the confines of a worker.
As for the salary, if it is still planned to be paid, an employment contract can be concluded, because the signing of an employment contract on both sides by the same person does not contradict labor legislation.
No questions arise in a situation where the general director is not the only founder. In such situations, an employment contract can and should be concluded. It can be signed by one of the founders.
How to justify non-payment of wages
So, if there is no employment contract with the CEO who is the sole founder, the justification for the founder’s source of income may be dividends. At the same time, the company is not obliged to use all its net profit to pay dividends; some of it can be used to develop the business.Here are the most common arguments for non-payment of wages.
- Dividends instead of salaries
If a decision is made to pay only dividends to the founding manager, it is necessary to comply general rules for processing such payments. Payments must be made:
- no more than once a quarter;
- at the expense of the organization’s net profit remaining after paying all taxes;
- based on the owner's decision.
- All profits go to development
There is also a way not to pay wages in the presence of an employment contract, namely:
- Indefinite leave without pay
- application by the general director to grant him indefinite leave without pay;
- an order granting the general director an indefinite leave at his own expense.
Way to save
If an employment contract is concluded and the director’s salary is paid, then you can save money by stipulating in the employment contract the condition of working part-time, i.e. part-time (4 hours instead of 8 hours a day, 20 instead of 40 hours a week). Then the salary can be half as much. True, in this situation it is better to focus not on the regional “minimum wage”, but on the average salary level in your industry. Recently, for tax officials, the compliance of wages with the minimum wage has ceased to be a criterion for the absence of “salary” schemes; they compare company salaries with industry averages.
To summarize the above, I would like to say that in our practice, cases of imposition of penalties in the absence of an employment contract or non-payment of salaries to the director are extremely rare. Therefore, we believe that you should not waste time on preparing a large number of unnecessary documents and worry about liability for the fact that Founding CEO does not receive wages.
When a company is created, the director is elected by the general meeting of participants. An employment contract is concluded with the manager. But according to the law, one person can establish a limited liability company. Is an employment contract necessary in this case and how to conclude it correctly? How to pay for the work of such a “sole worker” and not make mistakes with taxes? You will learn about all this from our article.
The general director of the company is elected by the general meeting of its participants (Clause 1, Article 40 of the Federal Law of 02/08/1998 No. 14-FZ “On Limited Liability Companies”; hereinafter referred to as Law No. 14-FZ). The founders can appoint a person to this position, either from among themselves or from outside.
In general, an employment contract () is concluded with the elected manager. The employer in relation to the employee - general director is the organization represented by one of its owners. On behalf of the organization, the agreement is signed by one of the participants to whom the general meeting has granted such powers.
To avoid controversial and dangerous situations, you can pay both dividends and salaries. In this case, the salary may be the minimum, but not lower than the established one or the industry average.
"Salary" taxes
Both salaries and dividends are taxed, but at different rates. Salary - 13%, dividends - 9%.
Dividends are paid from the net profit of the organization to shareholders (participants) if they have a property right to a share in the authorized capital of the organization. This is not work activity. Dividends are also not payments related to the performance of work (services) under any civil contract. Therefore, they are not the basis for the calculation and, accordingly, payment of insurance premiums ().
Note
In the event of liquidation of an organization, the director, the sole founder, can assert his rights both as a creditor and as a shareholder.
As a creditor, he will secondarily claim payment in the amount of average monthly earnings ().
As a shareholder, he lays claim to the property remaining after satisfying the claims of all creditors ().
When calculating wages, an obligation arises to pay insurance contributions to extra-budgetary funds. They are accrued on all remunerations and payments in favor of the employee made within the framework of labor relations And civil contracts for the performance of work or provision of services (Article 7 of the Federal Law of July 24, 2009 No. 212-FZ “On insurance premiums in Pension fund Russian Federation, Social Insurance Fund of the Russian Federation, Federal Compulsory Medical Insurance Fund"). This also applies to the payment of salaries to the director - the only founder. For an organization, this is an expense. cash. But for a person it is undoubtedly a positive factor, since he has the right to all types of social insurance benefits - maternity benefits, etc. - on an equal basis with all other employees. This is directly indicated in subparagraph 1 of paragraph 1 of Article 2 of the Federal Law of December 29, 2006 No. 255-FZ “On compulsory social insurance in case of temporary disability and in connection with maternity.”
Thus, the manager has to make a choice and take into account that with the payment of dividends and a lower income tax rate, he will have to make contributions for future pension provision from personal funds.
How to account for expenses
In general cases, accrued wages can be taken into account as part of labor costs (). What about the salary of the director - the sole founder? In our opinion, this clause of the Tax Code is applicable in this case, even if a written agreement with the general director - the sole founder was not concluded. After all, labor relations take place, since the employee is actually allowed to work, regardless of whether the contract is concluded “on paper” or not (,).
There is no need to draw up an employment contract with the director - the sole founder. After all, there should not be the same signature on both sides of the agreement, and the organization does not have another owner (letter from the Ministry of Health and Social Development of Russia dated August 18, 2009 No. 22-2-3199)
Paragraph 1 of Article 255 of the Tax Code determines that labor costs include any accruals to employees in cash and in kind related to the maintenance of these employees, provided for by the laws of the Russian Federation, labor or collective agreements. This paragraph refers, in particular, to established legal norms. And the basic norms of legislation in the field of labor relations and labor contracts are enshrined in the Labor Code.
In addition, in accordance with all expenses must be economically justified and documented. Labor costs, in the absence of an employment contract, can be confirmed by any documents indicating the existence of an employment relationship between the manager and the organization. It could be staffing table, salary slips and so on. That is, this once again confirms that the expenses for the salary of the general director - the only founder - can be taken into account in tax expenses.
And yet, it is necessary to take into account that during the inspection the Federal Tax Service may not agree with such conclusions and this position will have to be defended in court. But there is judicial practice that is positive for the taxpayer (FAS decisions Northwestern district dated 10.11.2007 No. A42-5270/2006, East Siberian District dated 10.10.2007 No. A33-15270/06-F02-6504/07, Northwestern District dated 04.23.2010 in case No. A13-5979/2009).
O. O. Kruzhilina,
for the magazine "Practical Accounting"
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The situation when the CEO and founder are the same person is not uncommon. This is not prohibited by law: one person can establish a company. How to formalize labor relations? Is it necessary to conclude an employment contract? How to pay for labor and not make mistakes with taxes?
Question from a webinar participant about cash transactions: in the company, the general director and the founder are the same person. How to conclude an employment contract. Is it obligatory to accrue and pay the salary of the general director? Is it possible to take the CEO's salary as an expense? Should the salary be the minimum, or whatever the company can afford?
Webinars for accountants
Employment contract with the founding director
The question of whether it is necessary to conclude an employment contract with the director or not does not have a clear answer among specialists. There was an explanation from Rostrud on this matter. Letter No. 2262-6-1 dated December 28, 2006 states: the specifics of regulating the work of the head of an organization are provided for in Chapter. 43 Labor Code of the Russian Federation. According to Art. 273 of the Labor Code of the Russian Federation, the provisions of this chapter do not apply to the head of the organization if he is the only participant (founder) of the organization.
According to Art. 56 of the Labor Code of the Russian Federation, an employment contract is concluded between an employee and an employer. In this situation, in relation to the general director, his employer is absent.
Signing an employment contract by the same person on behalf of the employee and on behalf of the employer is not allowed. Thus, in this case, an employment contract with the general director as an employee is not concluded.
The Ministry of Health and Social Development of Russia, in letter No. 22-2-3199 dated August 18, 2009, takes the same position: from the norm of Article 273 of the Labor Code it follows that signing an employment contract both on behalf of the organization and on one’s own behalf is impossible, since there cannot be one and the same signature on both sides, but the organization does not have another owner.
But there are also court decisions. For example, the resolution of the Federal Antimonopoly Service of the North-Western District dated May 19, 2004 No. A13-7545/03-20 states that in accordance with Art. 11 of the Federal Law of 02/08/1998 No. 14-FZ “On Limited Liability Companies” (hereinafter referred to as Law No. 14-FZ), the decision to establish a company can be made by one person. According to paragraph 1 of Art. 40 of Law No. 14-FZ, the sole executive body of the company (general director, president and others) is elected by the general meeting of the company’s participants for a period determined by the company’s charter. The sole executive body of the company may also be elected from outside its participants. An agreement between the company and the person performing the functions of the sole executive body of the company is signed on behalf of the company by the person presiding over the general meeting participants of the company at which a person is elected to perform the functions of the sole executive body of the company, or a participant of the company authorized by a decision of the general meeting of participants of the company. Thus, the assumption by the sole founder of a company of the functions of the executive body of the same company does not contradict either legal norms or the provisions of the company’s charter.
So, if an organization enters into an employment contract, then the following should be remembered.
- The board of directors decides on the election of the general director. The employment contract with the general director is signed by the only participant on behalf of the company, since there are no other participants. In this case, the employer will be a Limited Liability Company.
- The hiring of the general director of the company is formalized in the usual manner, in accordance with Art. 68 Labor Code of the Russian Federation. Based on the decision of the sole participant of the LLC to appoint a general director, a hiring order is issued, which will be signed by the general director.
Founding director salary
If the manager is the only participant, in the absence of a written employment contract, the amount of his salary can be provided for in the staffing table.
If there is an employment contract, then according to Art. 57 of the Labor Code of the Russian Federation, the condition on remuneration of the employee must be included in the employment contract. According to Article 133 of the Labor Code of the Russian Federation, the monthly salary of an employee who has fully worked during this period the standard working hours and fulfilled the labor standards ( job responsibilities), cannot be lower minimum size wages (minimum wage).
In addition, the director, who is the sole founder, may receive dividends and not receive a salary. But when paying them, the following rules must be observed:
- pay dividends no more than once a quarter;
- pay from the organization’s net profit remaining after paying all taxes;
- based on the owner's decision.
The most common mistake when paying dividends is paying them monthly. Any audit will reclassify such payment of dividends as salary with all the ensuing tax consequences.
How to take into account the cost of the founder's director's salary?
Is it possible to take into account the salary of the founding director as part of labor costs, because, as for general cases, the accrued salary is taken into account as part of expenses (Clause 1 of Article 255 of the Tax Code of the Russian Federation)?
The fact is that labor relations take place, since the employee is actually allowed to work, regardless of whether the contract is concluded “on paper” or not (Part 2 of Article 16, Article 19, Part 2 of Article 67 of the Labor Code of the Russian Federation) . Therefore, it can be assumed that this clause of the Tax Code is applicable in this case, even if a written agreement with the general director - the sole founder was not concluded.
If an agreement is concluded, then the salary must be specified in the agreement. Therefore, it can also be taken into account in labor costs.
Webinars for accountants at Kontur.School: changes in legislation, features of accounting and tax accounting, reporting, salary and personnel, cash transactions.
Let's look at them.
“Natalia” addressed the first question to the forum participants:
"Natalia"“Is it necessary to conclude an employment contract with the general director if he is the only founder?”
Clause 1 of Article 40 of Law No. 14-FZ “On Limited Liability Companies” stipulates that the sole executive body of the company (general director, president) is elected at the general meeting of company participants for a period determined by the company’s charter (if the charter does not refer to the resolution of these issues as competence of the board of directors).
However, this provision applies to cases where there are other participants in addition to the director. If the singular director founded the company, then the relationship is different.
The first to come to the aid of “Natalia” was regular forum participant “Oleg”:
"Oleg"“There are many explanations from officials on this issue. For example, the letter of the Ministry of Health and Social Development of Russia dated August 18, 2009 No. 22-2-3199 establishes that the specifics of regulating the work of a manager are regulated by Chapter 43 of the Labor Code.
Article 243 of the Labor Code stipulates that the provisions of this chapter apply to the heads of organizations, regardless of their organizational and legal forms and forms of ownership, with the exception of the case when the head of the organization is the only participant (founder), member of the organization, owner of its property.
Therefore, officials note: it is impossible to conclude an employment contract with oneself, since the society simply does not have other members. Consequently, the only participant in the company in this situation must, by his decision, assume the functions of the sole executive body - director, general director, president. Management activities are carried out without concluding any contract, including an employment contract.”
“Anastasia Nikolaevna” joined the discussion:
"Anastasia Nikolaevna"“And I found a letter from Rostrud, which expresses a similar point of view. It notes that in this case, in relation to the general director, his employer is absent. This means that an employment contract is not concluded with him as an employee. Signing an employment contract by the same person on behalf of the employee and on behalf of the employer is not allowed (letter of Rostrud dated December 28, 2006 No. 2262-6-1).
However, there are court decisions in which arbitrators take the opposite opinion. For example, the resolution of the Federal Antimonopoly Service of the West Siberian District dated August 6, 2008 No. Ф04-4841/2008(9485-А45-41) states that the manager, acting as the sole founder, is an employee and can enter into agreements on behalf of a limited liability company with constitutes an employment contract."
"Natalia""Thanks a lot!"
From the above explanations it is clear that both situations will be legal: an employment contract has been concluded with the director or not. However, in order to avoid disagreements with the tax authorities, we believe that such an agreement on behalf of the company is worth concluding.
“Inna” addressed the participants with a new question:
"Inna"“Is the director of an organization, who is its sole founder, subject to compulsory social insurance in case of temporary disability and in connection with maternity?”
"Oleg"“If an employment contract has been concluded with the director, then the payment of contributions occurs in the general manner, as with an ordinary employee.”
"Evgeniya"“That's right. The same position is expressed by officials in the order of the Ministry of Health and Social Development of Russia dated June 8, 2010 No. 428n. Thus, if the manager has an employment relationship with this organization, and also when he is the sole founder of the organization, the owner of its property, then for the purposes of compulsory social insurance in case of temporary disability and in connection with maternity, he is classified as a person working under an employment contract. The specified manager is subject, in accordance with Article 2 of the Federal Law of December 29, 2006 No. 255-FZ, to compulsory social insurance in case of temporary disability and in connection with maternity and has the right to receive insurance coverage in the manner and under the conditions established by the legislation of the Russian Federation" .
"Inna""Thank you".
"Irochka"“Did I understand correctly that from all payments made in favor of the general director (the sole founder), it is necessary to pay contributions to all extra-budgetary funds?”
"Oleg"“The director with whom the employment contract was signed is just an ordinary employee. And he needs to pay wages, withhold personal income tax from it, and pay insurance premiums. Relations with him are regulated in a general manner, since the provisions of Chapter 43 of the Civil Code (Article 273 of the Labor Code of the Russian Federation) do not apply to him.”
"Oksana"“The question of whether it is necessary to accrue contributions to funds for payments in favor of such a manager was settled by the Law of December 3, 2011 No. 379-FZ. According to this law, changes have been made to the existing regulations, defining the procedure for calculating and paying insurance premiums, namely:
– Law of December 15, 2001 No. 167-FZ “On compulsory pension insurance in the Russian Federation”;
– Law of November 29, 2010 No. 326-FZ “On compulsory health insurance in the Russian Federation”;
– Law of December 29, 2006 No. 255-FZ “On compulsory social insurance in case of temporary disability and in connection with maternity.”
Thanks to the amendments made, the heads of organizations are recognized as insured persons for pension insurance, medical insurance, as well as in case of temporary disability and in connection with maternity. This law came into force on January 1, 2012.
The object of taxation with insurance premiums is payments and other remuneration accrued by payers of insurance premiums in favor of individuals within the framework of labor relations and civil contracts (Part 1 of Article 7 of the Law of July 24, 2009 No. 212-FZ). According to these changes, payments made under an employment contract are subject to insurance contributions.”
Those working under an employment contract, including heads of organizations who are the only participants(founders), members of organizations, owners of their property, or under a civil law agreement, are insured persons who are subject to compulsory pension insurance (Clause 1, Article 7 of the Law of December 15, 2001 No. 167-FZ).
Participants in compulsory health insurance are insured persons working under an employment contract, including heads of organizations who are the only participants (founders), members of organizations, owners of their property, or under a civil contract (clause 1 of article 10 of the Law of November 29 2010 No. 326-FZ).
Persons working under employment contracts, including heads of organizations who are the only participants (founders), members of organizations, owners of their property, are subject to compulsory social insurance in case of temporary disability and in connection with maternity (subclause 1, clause 1, article 2 Law of December 29, 2006 No. 255-FZ).
"Love"“What about contributions for compulsory insurance against industrial accidents and occupational diseases?”
"Oleg"“They need to be charged too.”
"Tamara Petrova"“Yes, such contributions also need to be paid, since persons performing work on the basis of an employment contract concluded with the insured are subject to compulsory social insurance against industrial accidents and occupational diseases. This provision is enshrined in paragraph 5 of the Law of July 24, 1998 No. 125-FZ “On compulsory social insurance against industrial accidents and occupational diseases.”
"Love""Thank you".
“Tatiana” addressed the forum participants with another question:
"Tatiana"“In our company, the director is the only founder. Tell me, do I need to pay contributions if my income exceeds 512,000 rubles?”
"Oleg"“If an employment contract has been concluded with this person, insurance premiums are paid in accordance with the general procedure. The amount depends on the amount of payments and other remunerations made in relation to such a person (on an accrual basis from the beginning of the year).
Thus, if for payers of contributions to state extra-budgetary funds the base for calculating insurance contributions, taking into account its indexation, is for each individual an amount exceeding 512,000 rubles (cumulative from the beginning of the year), then from January 1, 2012, contributions are paid in special order:
– in the Pension Fund of Russia – 10 percent;
– in the Social Insurance Fund – 0 percent;
– to the Federal Compulsory Medical Insurance Fund – 0 percent.
This provision is enshrined in the Decree of the Government of the Russian Federation of November 24, 2011 No. 974 “On the maximum value of the base for calculating insurance contributions to state extra-budgetary funds from January 1, 2012.”
“Oleg’s” answer was supplemented by “Ekaterina”:
"Catherine"“In addition, if the manager’s income has exceeded 512,000 rubles since the beginning of the current year, then in terms of contributions to pension insurance, contributions are paid only to the insurance part. I note that this does not depend on the age of the manager (Article 33.1 of the Law of December 15, 2001 No. 167-FZ “On Compulsory Pension Insurance in the Russian Federation”).”
"Tatiana"“Thank you for your detailed comments.”
"Ulyana"“Are payments made to the manager (sole founder) taken into account in the taxable base for income tax?”
"Catherine"“Yes, they are taken into account. Moreover, as labor costs (clause 1 of Article 255 of the Tax Code of the Russian Federation). As for contributions, they can be taken into account as part of other costs.”
Contributions for compulsory social insurance against industrial accidents and occupational diseases, as well as the amount of insurance contributions to the Pension Fund of Russia for compulsory pension insurance, to the Social Insurance Fund of Russia for compulsory social insurance in case of temporary disability and in connection with maternity, to the Federal Fund compulsory health insurance and territorial compulsory health insurance funds for compulsory health insurance, accrued in the manner established by Russian legislation, are subject to accounting as part of other expenses associated with production and sales (clause 45, 1, article 264 of the Tax Code of the Russian Federation).
We consider it our duty to remind you that reports are submitted in this way if the enterprise does not have hired workers. If there is at least 1, then all reports must be submitted already completed. But we don’t take ourselves into account as an employee. It has already become a little easier for entrepreneurs. Although there is still a lot of unnecessary statistical data remaining from Soviet times that needs to be filled out and submitted. The ability to submit certain types of documents using the Internet has significantly simplified the work of thousands of accountants and entrepreneurs.
If a company (LLC, organization, firm, enterprise) has several founders
If several founders took part in the creation of an enterprise and one of them became a director, then the situation changes radically. It will be necessary to conclude with the General Director Employment Contract. He becomes an hired employee with the ensuing consequences. Since he is now a staff member, he needs to pay wages and deduct reports from them.
You can find out more about what actions need to be taken when applying for a director’s job. There is also a standard sample of an order for appointment to a position.
If you have any questions, feel free to ask them. We will try to respond promptly to them, respond quickly to the best of our ability.
Good luck to everyone in business! Bye!
