Page 31 - demo
P. 31
31
Directors’ liability
considerations
or article 562 CoCo (for a public limited liability can, notwithstanding the fact that the directors
company). The company needs to deliver proof of have received discharge, invoke the director’s
the management error, the damage it has suffered liability until the statute of limitation period has
as well as the existence of a causal link between expired.
the management error and the damage.
2. Civil liability for violation of the Companies’
The liability for management errors is in principle Code or of the articles of association (article 263 /
personal, hence, each director will be obliged 528 CoCo)
to compensate the damage caused by his own
actions. Nevertheless, the court can hold the Directors are jointly and severally liable towards the
directors liable “in solidum” (or even jointly company as well as towards third parties for all the
and severally in case of joint errors), when their damage caused by a breach of provisions of the
various erroneous actions have led to the same Companies Code or of the articles of association of
damage. Consequently the damage could be the company.
claimed from each director for the entire amount of
indemnification. The director who has paid the total Directors will be held liable and an indemnification
indemnification, will then be able to claim from the will need to be paid provided that the claimant has
other directors their respective portion. delivered proof of the violation and of his damage
as well as of the existence of a causal link between
Examples of management errors are the said breach and damage.
following: closing an agreement under clearly
disadvantageous conditions, granting a credit In case of a breach of the Companies’ Code or
without further consideration, dismissing an of the articles of association, the directors are
employee in a way that obliges the company to presumed to be jointly and severally liable. A
pay a high compensation, involving the company in director can escape from this joint and several
dubious operations, omission to subscribe to the liability, provided that he can demonstrate that
necessary insurance policies, etc. (which is rather difficult in practice):
The limitation period for claims regarding directors’ — he did not take part in the violation;
liability, based on the articles 262 / 527 CoCo — no fault can be imputed to him;
(as described here above) amounts to 5 years. — he had no knowledge of the violation, or he has
Furthermore, the director’s liability can, in principle, denounced such violation at the first general
no longer be invoked by the company in the event meeting of shareholders after he became aware
the general shareholders’ meeting has granted thereof and the breach has been mentioned in
discharge to the directors. Please note, however, the convocation to this general shareholders’
that discharge has no effect whatsoever on the meeting.
liability of the directors towards third parties, who
© 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.
