Sourse: Liga BUSINESS

The involvement of the company head in all areas of the company may seem unnecessary at first, but controlling the main trigger points and applying a risk-based approach reduces the negative consequences for the company and the head himself to a minimum.

What should the director pay attention to to prevent “extinguishing the fire” here and now?

  • Daily monitoring of operating activities

Control over the activities of the company, as a rule, is the main functional responsibility of the director. But there are times when the company head relies too much on his deputies, and later it may turn out that the deputies are not entirely white-handed and acted illegally or implicated the company in some kind of illegal schemes. At the same time, the legislation of Ukraine establishes liability for company officials for committing crimes in the economic sphere. Do not neglect the responsibilities of the director and have an eye out for the activities of the company.

  • Checking counterparties

A preliminary check of counterparties will help not only to avoid financial (insolvency of the counterparty, inability to collect debts), tax (excessive attention of the tax authorities due to cooperation with such a counterparty) and reputational risks, but can also serve as a preventive measure for undue attention of law enforcement agencies. In particular, due to cooperation with companies, thanks to which your business may be suspected of financing terrorism.

  • Availability of licenses / permits

If the activity of the company supposes the availability of licenses or permits for certain types of activities or works, then you need to monitor the validity of such permits. After all, conducting licensed activities without licenses or permits can lead not only to a fine for the company, but also to the imposition of administrative responsibility on company official.

  • Company assets

The days of raider attacks have not yet passed. Therefore, the assets of any enterprise can be at risk. Check the registries at regular intervals to make sure nothing has changed. Use official state registers, such as EDRPOU (to check the owners of company, beneficial owners), the State Register of Property Rights to Immovable Property (to check the owner of real estate), as well as resources to check counterparties, in which you can also see changes in relation to your own enterprises.

  • Accounts payable

Accounts payable is an important aspect of a company’s financial management. There is nothing wrong with the presence of accounts payable itself. It only means that the company has obligations before its counterparty. Problems can begin when the maturity of such debt expires. This can lead to a deterioration in the financial condition and solvency of the enterprise and reputational risks. And in the worst-case scenario, the assets of the company could be seized in the event of legal proceedings.

  • Litigation

Lawsuits in which the company is the defendant can result in a deterioration in reputation, asset freezes and significant litigation costs. There are cases when company is unaware of the proceedings that have begun against it. Get in the habit checking court register for open proceedings against the company or its officials.

  • Taxes

Despite the fact that, as a rule, the chief accountant of the company is responsible for the completeness and correctness of tax deductions, the director should still keep tax issues under control. All necessary taxes and other deductions paid in full reduce the risk of tax audits. To be ready for the arrival of tax officials, you should monitor the plans of inspections of regulatory authorities. Such inspections can threaten not only with large amounts of fines for the enterprise, but also danger for officials who are personally responsible for the timely payment of taxes and fees.


  • Constituent documents and other documents related to the establishment and activities of the company

The director, especially if the last one is new, needs to check the availability and legal correctness of the formalization of constituent documents. This will make it possible to determine the legitimacy of the company itself, to understand the completeness of payment of the authorized capital by the owners of the shares, to ascertain the extent of the powers of the company head. Because the charter may contain restrictions on the actions of the director. Exceeding his authority by the director may entail financial and criminal liability.

  • Information security

Today information is the main asset of any company. The loss of even a part can lead to disastrous consequences. It is necessary to pay dignified attention to the organization of information security in the company – from using licensed software products and storing most of the important information on servers outside the location of offices, to implementing privacy policies and signing nondisclosure agreements with all employees and contractors.

  • Reputation

What can be more important than reputation in the information world? It takes a long time to build a reputation, but you can destroy it almost instantly. Maintain customer feedback, track PR materials, fill the media space with your presence and expertise and refrain from unethical business practices.