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Directors’ liability

considerations

Since in practice a lot of questions are raised
concerning the liability of directors within a private
limited liability company (“besloten vennootschap
met beperkte aansprakelijkheid” / “société privée
à responsabilité limitée) and a public limited liability
company (“naamloze vennootschap” / “société
anonyme”), we took the opportunity to set out in
this newsletter the basic principles regarding such
liability.

1. Civil contractual liability for shortcomings
in management ( “management error” - article
262 / 527 Companies’ Code (hereafter referred
to as “CoCo”))

As representative of a private or public limited
liability company, being the two most popular
forms of companies in Belgium, a director is liable
towards the company for the execution of its
mandate.

In order to determine whether or not management
errors have been made, the managerial actions of
a director are compared with those of a “normal
prudent and careful director acting under the
same circumstances”. Thus, a director shall
commit (a) management error(s) when a normal
prudent and careful director acting under the same
circumstances would not have performed the(se)
action(s).

It concerns a contractual liability which can in
principle only be invoked by the company. The claim
can be initiated in name of the company by the
general meeting of shareholders or by a minority
shareholder under the conditions set out in article
290 CoCo (for a private limited liability company)

© 2017 KPMG Central Services, a Belgian Economic Interest Grouping (“ESV/GIE”) and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Belgium.