The personal liability of directors and supervisors is increasingly in the spotlights. Claims are becoming more and more common, both with regard to listed companies and in the SME sector. Directors and supervisory directors often do not realise what risks are connected with their position. Despite the good intentions and efforts, you may find the tide has turned and you can be held personally liable for mismanagement. Directors can also be held liable for the mistakes of fellow directors.
In principle the legal entity is itself liable for the debts which are incurred. It can nevertheless occur that you, as director or supervisory director, are held liable together with (or instead of) the legal entity. In addition to the external liability, which is liability with regard to third parties (creditors, employees, receivers, banks, tax and customs administration, etc.), the legal entity itself can be of the opinion that you have not properly performed your task and can hold you liable. This is sometimes called internal liability.
The law sets out in so many words that directors are obliged to perform their task properly. What 'proper task performance' is understood to mean, is not defined in the law. What this should be understood to mean must be deduced from the case law and literature. Consequently, the actual situation is of essential importance to properly determine your position.
We not only advise our clients in cases in which they have already been held liable, but precisely also in situations in which there is a risk of personal liability. In addition, we advise third parties on their positions and claims compared to individual directors and supervisory directors. For example, cases where the legal entity itself or a trading partner is in trouble. Have the books been properly kept? Has a temporary inability to pay been reported to the tax and customs administration? What is the position with regard to the bank? It is possible to still take on obligations? Are there selective payments? Have the shareholders and supervisory directors been informed? Etc. In addition, we often assist directors in discussions with banks and receivers. We do not act on behalf of banks, nor do we accept appointments as receiver. This means we are in an excellent position to take on such parties without restrictions or impediments. Should the matter ultimately result in proceedings, we are happy to place all our expertise at your disposal.
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A lot is expected of directors. The general management of the company, the economic strategy, the financial health, etc. are on your shoulders. You carry the responsibility of your company. Sometimes the tide can turn against you. Directors, supervisory directors, but also de facto managers are increasingly the target of dissatisfied fellow directors, shareholders, creditors, receivers, banks, etc. This can result in a personal claim of liability, resulting in legal action to claim damages or an enquiry.