Directors are liable towards the company for any damage incurred if they fail to fulfil their duties. In this regard, it is necessary to prove fault on the part of the directors. If more than one director is held liable for the same damage, each of the directors is severally liable for such damage to the extent to which such damage may be attributed to that director personally.
In the event of a breach of duty, the company, its shareholders and creditors may be entitled to bring a claim against the relevant director. However, creditors are only entitled to bring a claim against directors for indirect damages if the company becomes insolvent. In this case, creditors must first make an application to the Bankruptcy Administration to file a compensation claim against the directors.
Unless it is proven that the directors have appointed a third party to fulfil delegable duties without due care, the directors will not be liable for damages arising from the acts and decisions of the person to whom the duties have been delegated. This remains the case even in light of the director’s general duty of care and supervision.
In addition to damages incurred as a result of a breach of duty, directors may also be held liable if the company fails to meet its public debts, such as tax obligations and social security payments. However, this joint and several liability only extends to directors who have been authorised to represent the company. Therefore, directors who are not signatories of the company cannot be held liable in this respect. If the directors in office are different from those directors who were in office when the relevant liabilities arose, the current directors will be jointly and severally liable with the former directors to pay the relevant public debts. To bring a claim against directors for the recovery of these debts, it is necessary for the outstanding amounts not to be collected or to be considered impossible to collect from the company itself. It is important to note that there is no requirement to establish fault or negligence in performing the duties in this regard.
In addition to civil liability for public debts, the Code also provides for directors to be criminally liable in specific circumstances. This includes drafting of inaccurate documents regarding the incorporation of the company, committing fraud in the valuation of in-kind capital contributed, making false declarations for registrations at the Trade Registry, improper maintenance of the company’s records, and a failure to file insolvency proceedings.