As a general rule, each director must act with the due care and diligence of a prudent businessperson and keep the company’s trade secrets. Directors who breach this standard are jointly and severally liable to the company. In certain, rather exceptional, cases a director may be liable towards the shareholders and/or company’s creditors.
Furthermore, directors of illiquid companies must refrain from making any payments other than those necessary for its ordinary course of business and must not undertake actions which could result in damaging creditors or placing them at disadvantage. In addition, from the occurrence of illiquidity, each company is required to undertake financial restructuring measures in order to restore its liquidity.
The directors of a company may be fined up to HRK 50,000 (approximately EUR 6,600) for failing to comply with their responsibilities at the time of company’s distress as described above, whereas the company itself may be fined up to HRK 1,000,000 (EUR 132,000) for the same reason.
Also, directors are required to file for bankruptcy in the case that a bankruptcy event occurs (see point 6 above).