What is this agreement

The Executive Officer Agreement (smlouva o výkonu funkce jednatele) is a contract between an s.r.o. (limited liability company) and its managing director, regulating their function, rights, duties, compensation, and responsibilities.

📌 Must be in writing and approved by the general meeting.
Without this, the function is considered unpaid and informal under Czech law.

Key elements of the agreement

• Parties and role definition

• Term (fixed / indefinite)

• Remuneration

• Expense reimbursement

• Duties and decision-making rights

• Confidentiality and non-competition clause

• Compliance with fiduciary duty

• Termination clause

• Liability and indemnification

• Approval of the contract by the general meeting

✅ Why this agreement matters

• ensures legal payment of salary and expenses

• protects both company and managing director

• enables enforcement of duties and legal liability

• valid tax treatment of executive payments

• prevents default to unpaid mandate

❌ Frequent mistakes

• no written contract → invalid compensation

• not approved by general meeting → unenforceable

• vague or missing provisions on rights or limits

• no clarity on expenses or competition

• lack of fiduciary duty clause

💡 Practical tip

📌 Even if the director is also the sole shareholder, the contract must be signed separately and formally approved to comply with law.

Executive Agreement Template – Offer

Available for a symbolic fee:
– Czech-English executive agreement template,
– clauses on remuneration, expenses, confidentiality, non-compete, and removal
– guidance for approval and statutory protection

Contact via form – don’t run a company without a contract.

FINAL THOUGHTS – WHAT NOW?

Executive Officer Agreement isn’t  just a formality – it’s a legal shield, if drafted properly. And a trap, if not.

Do you want to be sure your contract will hold up even in a crisis? Get in touch and let’s schedule a meeting. I am a specialist on contract law – more information here.