Liability actions against company directors are regulated in Royal Legislative Decree 1/2010, of 2nd July which approves the revised text of the Spanish Companies Act, particularly with regard to the following articles:
- 238 to 240, which contemplate corporate action for liability;
- 241, which regulates individual action for liability;
- 367, which shapes the joint and several liability for company debt.
The basic characteristics of these actions are:
- Corporate action. It requires the
the existence of damage to the company’s assets. It can be brought by the company, subject to the prior agreement of the general meeting, by the partners and also by the company’s creditors.
- Individual action. It requires the existence of the acts of directors which have directly damaged the interests of the partners and/or a third party. It may be filed by the partners and/or by third parties.
- Action for liability for company debts. It is of an objective nature, it is imposed “ex lege“, by legal imperative, for the causes established in article 367. The existence of damages is not required. It can be exercised by the shareholders and/or by third party creditors.
The Judgement of the Supreme Court of 2nd November 2023 (ECLI:ES:TS:2023:4569) examines the nature and the limitation term of the corporate and individual actions for liability (liability for damages).
Said judgement draws on the premise of the provisions of article 949 of the Commercial Code (“action against partners, managers or directors of the companies shall expire four years after they cease for any reason to exercise the administration of the company”) to explain that case law considers that what is decisive is not the registration of the termination in the Commercial Registry but the termination itself, without prejudice to that fact that the registration of the termination is obligatory, and that the termination has no effect for third parties unless it is duly registered.
This criterion established by the Commercial Code offers the advantage of the chronological objectification of the term, but also the drawback of the disconnection between the moment when the damage is caused (or the moment when it manifests itself) and the start of the calculation of the limitation term, in such a way that the paradox may arise that the term starts to run before the damage occurs or manifests itself.
The amendment introduced by Law 31/2014, of 3rd December, overcame this disadvantage by establishing a new article 241bis for corporate and individual liability actions, which stipulates that “said actions shall be limited to four years as from the day upon which they may have been exercised”.
It also explains that, following the amendment, the scope of application of the provisions of 949 of the Commercial Code have been limited to partnerships.
Judgement of the Supreme Court of 31st October 2023 (ECLI:ES:TS:2023:4540) examines the nature and the limitation term of joint and several liability action (liability for debts).
As for their nature, it reflects the case law on the matter, and explains:
- That the law constitutes the directors as the personal and joint and several guarantors of the company’s obligations after the date of concurrence of the legal cause for dissolution.
- That it is a case of liability for the debt of others, “ex lege”, caused by the breach of a legal duty of the company director.
- That it seeks to guarantee the rights of company creditors and partners.
Since this is a legal liability action for the debt of others with its own rules on procedure, article 949 of the Commercial Code is not applicable, and the limitation term is that of the joint and several guarantors, that is to say the same as that of the guaranteed obligation (the corporate debt) according to its nature in each case (contractual, extra-contractual obligations, etc…). The relationship between the company and the director is one of joint and several liability.
It follows that the dies a quo of the limitation period of the action is the same as that of the action against the debtor company. In the present case, it was the limitation period for personal actions contemplated in article 1964 of the Civil Code (i.e. five years).
In conclusion, the aforementioned judgements clarify the nature, calculation, and term of limitation of the different liability actions against directors, resolving previous doubts that had arisen regarding the scope of application and the calculation of the term indicated in article 949 of the Commercial Code.
Mireia Bosch
Vilá Abogados
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23rd February 2024
