In the business world, the relationship between a company and its designated administrator is essential for long-term development. Often, this relationship is not formalized through a management contract, a document that clearly establishes the responsibilities, objectives, and benefits of those involved.
A management contract is an agreement between a company and its administrator, defining how the company will be organized. Through this contract, the administrator takes on the responsibility of managing daily operations, implementing strategies, and achieving the objectives set by the shareholders.
The management contract provides clarity and security for both parties, proving its usefulness. On one hand, it clearly defines expectations for the administrator, and on the other, it helps avoid conflicts by establishing measurable objectives, performance evaluation criteria, and clear and predictable obligations.
The management contract does not need to be drafted with excessive formality but should be detailed enough to cover essential aspects such as the administrator’s responsibilities, objectives, potential performance indicators, and remuneration.
Essentially, like any contract, the management contract is flexible, allowing the parties to adjust its terms according to the company’s needs. However, it should be noted that modifications can be made through an additional agreement.
A clearly drafted contract protects both the company and the administrator, ensuring that in case of disagreements, the steps to follow have already been established by the parties.
For an entrepreneur, a management contract is not just a formality but an important tool to ensure the smooth operation of the business. Whether you are just starting or already running a well-established company, such a contract brings clarity, professionalism, and a solid framework for growth. It is therefore recommended to consult a lawyer to draft this essential document for the natural development of the company.
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Daniel Pavelescu – Attorney at Law
