Director liability

A legal person (private company, limited company, foundation, association, etc.) cannot carry out any activities itself. It is the director who does this. However, what happens if this director has done something which he knew would cause damage to the company or to third parties? GMW advocaten advises and instigates proceedings with regard to disputes about director liability. 

Improper performance

Legal persons have rights and obligations. They also have their own separate capital. As a legal person cannot carry out any (real) acts itself, a board of directors is appointed. These directors must then carry out the tasks assigned to them properly. If they fail to do so, this amounts to an improper performance of the task. The legal person can hold the director liable for this.

Serious personal reproach

In the case of the improper performance of a task by a director, this must amount to a serious personal reproach. It depends on the circumstances whether or not this applies. Examples of improper performance of a task in jurisprudence include:

  • a director who does not observe the legal regulations and/or the articles of association;
  • a director who places his own interests above those of the legal person;
  • a director who takes unnecessary financial risks;
  • a director who does not conclude the necessary insurances;
  • a director who removes (financial) assets from the company;
  • liability in the case of bankruptcy because parts of the capital have been withdrawn, annual documents have not been registered in time or the administration has not been properly carried out.

The improper performance of a task can have significant (financial, and sometimes criminal) consequences for a director and for the company. This regularly results in court cases. Be prepared for this and ask for expert advice in good time. We can give you an insight into your legal position as a director. We are also happy to advise you on how to deal sensibly with your responsibilities. If it comes to it, we will obviously support you during legal proceedings.