In what type of responsibility can the directors of a company incur?
On the basis that the director of a company is the person who is making the decisions, as well as representing company, it seems logical and coherent that the law foresees that he must respond to the damage caused by acts or omissions contrary to the law or the bylaws or those carried out in breach of the duties inherent to the performance of the position, provided that fraud or fault has been involved.
Additionally, it is interesting to note that the responsibility will be extended equally to de facto and not only de jure director, being considered for that purpose those persons who perform without title, with a null or extinguished title, or with another title, the manager’s own functions , as well as those people who direct from the envelope the decisions of the “fictitious” director.
Directors may incur the types of liability set forth below, depending on the rule type that has been violated.
Commercial responsibility will be incurred when they do not comply with the duties set forth in the Capital Companies Act, (duty of diligence, corporate discretion, loyalty and avoiding situations of conflict of interest).
The directors will respond to the company, to the partners and to the social creditors, who may dispose of the social action when the aforementioned duties have been violated, and may end up forcing the director to indemnify with his own assets, the damage that has caused.
On the other hand, in compliance with the provisions of the tax regulations, since a liability derivation system has been established, directors may also incur fiscal responsibility. Consequently, other persons, in addition to the debtors or taxpayers, may be declared liable, either jointly and severally (the debt may be collected at any time), or subsidiary (it being necessary that the debtor is previously against the principal debtor), being able to distinguish:
- The subsidiary liability for the commission of tax infractions.
- The subsidiary liability for the pending tax obligations once the company has ceased its activity.
- The joint and several liability of those who are the cause or actively collaborate in the realization of a tax violation.
Regarding the criminal responsibility of directors, it should be noted that it has been reduced since the entry into force of the reform of the criminal code on July 1, 2015 since from this moment the legal entities may be directly responsible.
However, it is appropriate to clarify that it also arises the duty of directors to adopt and execute effective models of surveillance and control for the prevention of crimes, and that in the case of ineffective or insufficient, the responsibility for directors will remain. be imposed penalties of fine, imprisonment and provisional disqualification.
Finally, a brief mention should be made of the labor and Social Security responsibility that directors may incur as a result of the tasks and responsibilities of management and organization that they assume. Although there is no specific regulation on this matter, the provisions of the law on capital companies will apply.