The manager of a limited liability company is, as is the company`s board of directors and the general meeting [1.6.2.4 Management pact] is a governing body of the company. Therefore, the manager does not have an employment contract with the company (for more information, see the managers` service contracts) and z.B. the employment contracts law, the working time law and the annual leave law are by no means applicable. An exception is the right to an officer`s pension, as set out in the Employees` Pension Act. The responsibility of the director is similar to that of the company`s board of directors. For more information, please see [1.6.5.1 Management Responsibility] and [1.6.5.2 Criminal Responsibility]. This usually happens if the manager`s contract is terminated. In this regard, payments to the manager and restrictions and other conditions are agreed in detail. In this agreement, non-competitive and other competition restrictive conditions can be agreed more freely, and these are not considered as restrictive as, for example, the MD agreements concluded many years ago, because the manager is aware of the situation at the time of dismissal. The provisions of the Companies Act are essentially concerned with the competence and responsibility of the manager to the company, the board of directors and the shareholders. A written agreement should therefore be reached on matters relating to the position of Director General. The agreement provides for the possibility of setting, among other things, the terms of pay, leave and pension, the mandate, the terms of termination and the compensation to be paid upon termination of the assignment. A well-developed agreement will contain clear rules and bind the manager to the company.

Each company has different needs. Therefore, there is no complete model for a management agreement. The agreement should at least be the following starting point: in 2002, the Supreme Court of Finland confirmed that there were no restrictions in Finnish legislation regarding the termination of a management contract. Accordingly, the Supreme Court held that the Director General`s termination was legal because of a lack of confidence. Since then, this situation has not been called into question. The board of directors of a limited company has the right to dismiss the company`s head solely because of a lack of trust and without a duty of compensation, unless the parties have agreed otherwise. The board of directors decides the contractual terms on behalf of the company and negotiates them with the manager. However, the manager`s agreement is not legally an employment contract. For this reason, the Director General may be removed from his duties without notice, as long as a notice has not been the subject of a separate agreement.

The Board of Directors may, at any time, dismiss the Director General for no specific reason. If the termination is carried out in accordance with the provisions of the management agreement, the manager must not refer to a provision or law to improve his situation. As a result, termination compensation clauses and more specific termination provisions are generally included in a management agreement.