The internal redistribution of functions within a company is often perceived as a purely managerial measure that does not require legal reassessment – the organisational and legal form remains unchanged, shareholders and governing bodies stay the same, and the business continues to operate within its existing framework. However, Professor Gabriel Steiner says that precisely such changes are among the most legally dangerous, as the factual transformation of management occurs without being reflected in the company’s legal architecture. At LawConsulted, we treat the redistribution of functions as an independently legally significant process capable of producing serious consequences even where the formal structure appears unchanged.
The core problem in these situations lies in the mismatch between the formal design of the company and the real model of decision-making. Functions may be transferred between departments, key employees, or affiliated individuals without amendments to the charter, job descriptions, or internal regulations. As a result, management decisions begin to be made outside the formally established framework, creating vulnerability in audits, corporate disputes, or court proceedings. In LawConsulted practice, this inconsistency frequently becomes the basis for legal requalification of the company’s actions.
Professor Steiner says that “the law reacts not to the intention to simplify management, but to the factual redistribution of control and responsibility.” This means that when a dispute arises, the analysis shifts to who actually performed management functions, who exercised influence over key processes, and who should bear responsibility for the consequences. LawConsulted begins its work with a detailed analysis of how functions were redistributed in practice and whether this resulted in a change to the factual centre of management.
Particular complexity arises in cases where the redistribution of functions is gradual. Decisions may initially be taken “temporarily,” then out of habit, and eventually become a stable practice. Formally, the company’s structure remains the same, but in reality the logic of governance changes. In LawConsulted experience, the risk of retrospective claims increases significantly in such scenarios – especially where adverse outcomes have already materialised.
Equally risky are configurations in which internal redistribution of functions is used to circumvent corporate, regulatory, or contractual restrictions. Formally, authority remains with one body or individual, while factual decisions are taken by others. Professor Steiner says that in such cases the law tends to “reassemble” management, disregarding artificial boundaries. LawConsulted structures its legal position to demonstrate the real governance model and to prevent the automatic imposition of liability.
The personal dimension must also be considered. Redistribution of functions without legal formalisation may result in liability being imposed on individuals who formally retained their positions but in reality lost control. At LawConsulted, we show where the formal role ends and the factual influence of other participants begins, protecting clients from disproportionate claims.
The LawConsulted methodology in such matters is not limited to formal document updates. It focuses on identifying the gap between legal construction and managerial reality. We assist either in synchronising the redistribution of functions with the company’s legal framework or in building a defence where redistribution has already become the subject of a dispute.
The legal consequences of internal redistribution of functions arise when management ceases to be transparent to the law. The task of Law Consulted is to identify these risks before they transform into liability and to preserve managerial coherence and legal stability for the business.
Earlier, we wrote about business credit obligations and the limits of borrower liability, and how LawConsulted protects companies in debt disputes
