How to make a big deal

The general director of the company has the right to conclude transactions on behalf of his organization only if the transaction is not recognized as large. A major transaction will be any transaction related to the acquisition of property whose value exceeds 1/4 of the value of the entire organization.

Instruction manual

1

To find out if the transaction is large, compare the value of the acquired property with the book value of all existing assets of your organization at the last reporting date (based on accounting data). You are also required to conduct an independent examination of the assets of your organization (in the case of a closed joint-stock company).

2

If your organization concludes transactions in the ordinary course of business, then even if the purchase price or loans exceed 1/4 of the total cost of the enterprise, a major transaction is not recognized.

3

If the future transaction meets the criteria of a major one, inform all the co-owners of the legal entity (shareholders) in advance and get their approval for its completion. Or hold a general meeting of the founders or a board of directors to approve this transaction, since usually only such an order can be provided for in the statutory documents if your legal entity is registered as an LLC.

4

Based on the results of the meeting of shareholders, founders or the board of directors, a protocol must be drawn up no later than 5 days after its completion and approval or prohibition of the transaction. The protocol is signed by the chairman (general director) and the secretary. In addition, this document may be signed by other officials, if it is indicated in the charter of the organization.

5

If you have received consent for a major transaction, instruct the chief accountant to collect all the necessary documents for its conclusion and draw them up at the state registration authorities. In order for the chief accountant to act in accordance with the powers allocated to him, issue a power of attorney for him to conclude a transaction, signed by you and certified by a notary.

6

Please note: a large transaction concluded in violation of legal requirements may be declared invalid.