The ruling of the First Chamber of the Supreme Court of 28th April 2021 (ECLI:ES:TS:2021:5202A), analyses the following reasons for appeal:

1st.  Failure to file the annual accounts and presumption of the existence of legal grounds for dissolution due to the net assets being less than half of the company capital, considered in section e) of article 363.1 of the Spanish Companies Act (LSC – Ley de Sociedades de Capital). Joint and several liability of the director, under article 367.1 of the LSC.

2nd.  Individual liability of the director, established in article 241 LSC, for having caused or allowed the de facto closure of the company, without resolving the insolvency situation.

Regarding the first reason:

A) Reference is made to Supreme Court Judgment no. 202/2020, of the 28th of May, which alludes to the duty imposed on entrepreneurs by article 34 of the Commercial Code, to prepare the annual accounts at the end of the fiscal year, which must show the true image of the company’s assets, financial situation and results, taking into account, in the accounting of the transactions, the economic reality. It explains that the failure to fulfil this duty leads to the closure of the registry as provided for in article 282.1 LSC, as well as the regime of penalties established in article 283 LSC.

B) It highlights that, neither in the legal and statutory obligation to file the annual accounts, nor in the regulation of the legal causes of dissolution, is it established that the failure to fulfil the legal obligation to file the annual accounts constitutes a legal cause of dissolution, nor that the failure of the directors to fulfil said obligation entails the obligation to be responsible for the company’s debts, nor that the paralysis of the company or the impossibility to fulfil the company’s purpose can be presumed from this.

C) It explains that the proof of the existence of an equity deficit or company inactivity may be favoured by “peripheral facts”, among which, some of the minor case law considers the omission of the filing of accounts, in a way in which the lack of filing would cause a reversal of the burden of proof, with the defendant being responsible for the need to prove the absence of a situation of imbalance. It admits that the failure to prepare, approve and file the annual accounts deprives third parties of the knowledge of the company’s financial and accounting situation, which may be considered as an indication of the existence of losses or a lack of activity, although, in itself, it does not constitute direct proof of the existence of a situation of loss.

D) The appellant did not present any evidence regarding the situation of loss, and only asserted the lack of deposit from the fiscal year 2009, with the effect of the closure of the registry. The defendant proved their activity by means of models of self-assessment of the Corporate Tax, of the fiscal years 2010 to 2013, showing that, in those four fiscal years, net assets were more than the company capital.

Regarding the second reason:

A) It considers the nature and premises of the individual action of responsibility, granted to partners (shareholders) and third parties against directors, when the behaviour of the latter, while carrying out their functions, has caused them a direct damage (article 241 LSC).

    • Regarding its nature, it entails a special application of the generic extra-contractual responsibility considered in article 1.902 of the Civil Code. It is a responsibility for organic wrongdoing, incurred by the company director in the carrying out of their role. It is a direct and principal action.
    • Regarding the premises, it requires: (i) active or passive behaviour from the directors; (ii) that said behaviour is imputable to the management body; (iii) the behaviour of the director must be unlawful because it infringes the law, the company bylaws or the duty of diligence required of an orderly entrepreneur and of a loyal representative; (iv) that the unlawful behaviour is susceptible to causing damage; (v) the existence of a causal link between the unlawful behaviour and the direct damage caused.

B) It specifies that the individual responsibility of the directors for any contractual breach of the company or for any company debt cannot be used indiscriminately, for this would violate the fundamental principles of capital companies, such as their legal personality, their financial autonomy and their exclusive responsibility for the company debts. Article 241 of the LSC does not turn the directors into guarantors of the company. The law, when it has wished to impose joint and several liability on the directors for the non-payment of company debts in the case of a failure to fulfil the duty to promote the dissolution of the company, has restricted its responsibility to the credits subsequent to the occurrence of the legal grounds for winding up the company (article 367 LSC)

C) The legal duties whose non-fulfilment may result in the individual responsibility of the director have been summarised by the Chamber in the following way:

    • Failure to fulfil the legal obligation to guarantee the return of sums paid by the purchaser of a habitual residence;
    • In cases of insolvency of the debtor company: (i) continuing to contract credits in companies which have in effect disappeared and which have been left without assets due to seizures; (ii) arranging economic services for a very high amount just before the disappearance of the company; (iii) de facto disappearance of the company with actions of the directors which have directly impeded the satisfaction of the credits of the creditors; (iv) fraudulent emptying of assets, to the benefit of the directors or related companies or persons;
    • Unjustified withdrawal from the company’s assets of a large sum, in relation to the company’s assets, in a context of de facto liquidation, which in effect deprived the company of the ability to pay the claimed credit.

D) In the case of the court order, it was confirmed: (i) that the defendant company did not remain inactive, nor was it insolvent having made payments for part of the services provided by the claimant; (ii) that it did not place the orders knowing that it was not going to actually make the payments; (iii) that it is not known if it would have been able to satisfy the claim as a consequence of an orderly liquidation.

The Chamber dismisses the appeal because of the lack of justification for the appeal and for the express lack of grounds, for the appealed decision is in accordance with the doctrine established by the Chamber, according to the proven facts.

 

 

Mireia Bosch
Vilá Abogados

 

For more information, please contact:

va@vila.es

 

21st May 2021