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General examples of a violation of the articles of
association or the Companies Code are: omission
to file the annual accounts, omission to draw up the
consolidated annual accounts, omission to convoke
the general meeting of shareholders, performing
actions that fall outside the scope of the corporate
purpose of the company or that are in conflict with
the companies’ interest, violation of the conflict of
interests procedure, etc.
As regards the limitation period for claims
regarding directors’ liability, the same rules apply as
mentioned here above under 1.
3. Tortuous liability
According to article 1382 of the Civil Code, each
person who has caused damage to another person
is obliged to indemnify the latter for the damage
suffered.
The tortuous liability can be invoked by either the
company or by third parties, for the damage they
suffered following a management act or omission
that does not qualify as a contractual fault. The
claimant will have to prove the director’s fault, the
damage (other than mere damage resulting from
mismanagement or negligence in the execution
of the director’s mandate) and the existence of a
causal link between the fault and the damage.
An act/omission is not considered to be of a mere
contractual nature if it can be qualified as a violation
of the general duty of care that applies to everyone,
regardless of any contractual obligation, or, if this
act or omission constitutes a criminal offence.
An example of such a fault towards third parties
is, for instance, the execution of a sale-purchase
agreement on behalf of the company, whilst the
director knew or ought to have known that the
company was insolvent.
The statute of limitation for a tortuous claim for
director’s liability amounts in principle to 5 years. were committed on its behalf. If an individual
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4. Special and criminal liabilities
The Companies’ Code, the tax legislation and some
(and in recent years quite a lot of) economic laws
provide for several additional grounds for director’s
(criminal) liability, such as, a liability for the deficit
in case of bankruptcy when a manifest grave error
of a director that has contributed to the bankruptcy,
has been established.
Moreover, directors can be held liable for the
non-payment of withholding tax on professional
income, the VAT, and social security contributions.
According to this legislation, directors are on the
one hand personally liable for the payment of the
withholding tax on professional income or the
VAT in case of a repeated lack of payment (i.e.
in case of quarterly payments: non payment of
two outstanding debts within one year and, in
case of monthly payments: non payment of three
outstanding debts within one year).
The liability of directors for social security
contributions on the other hand only applies in
case of bankruptcy or in case of a violation of the
information duty as stipulated in article 40ter of the
Law of 27 June 1969 reviewing the Resolution law
of 28 December 1944 regarding the social security
of employees.
Furthermore, directors can be held criminally liable
as well. For example in case of late filing of the
annual accounts (art. 126, §1, 1° CoCo), refusal
to convene the general meeting of shareholders
when validly requested, not or incorrectly (omission
of required data) drawing up of the annual report,
abuse of the company’s assets (art. 492bis Criminal
Code), etc.
According to article 5 of the Criminal Code, a legal
entity will be held criminally liable for any offences
that are inextricably related to the accomplishment
of its object or the preservation of its interests
or which, according to the factual circumstances,
(e.g. director) willfully and knowingly commits
an offense, he can be held jointly liable with the
company.