{"id":9797,"date":"2025-04-01T13:01:32","date_gmt":"2025-04-01T11:01:32","guid":{"rendered":"https:\/\/www.navarrollimaabogados.com\/?p=9797"},"modified":"2025-04-01T13:01:32","modified_gmt":"2025-04-01T11:01:32","slug":"social-and-individual-action-of-administrators-responsibility","status":"publish","type":"post","link":"https:\/\/www.navarrollimaabogados.com\/en\/sociedades-en\/social-and-individual-action-of-administrators-responsibility\/","title":{"rendered":"Social and individual action of administrators&#8217; responsibility"},"content":{"rendered":"<p>Within legal entities, there are often different parties with different responsibilities who are expected to exercise due diligence in the performance of their duties. Failure to perform their duties properly exposes them to potential personal liability.<\/p>\n<p>In this post, we will focus on corporate directors and how they can be held accountable through corporate action or individual action, or even for losses\u2014similar from the outside, but each configured for very different situations.<\/p>\n<h3>ORIGIN OF LIABILITY AND DIFFERENCES<\/h3>\n<p>The liability of corporate directors arises from Article 236 of the Capital Companies Act (LSC), the precedent of which is found in the first section of precept 133 of the now repealed Public Limited Companies Act. This provision establishes in general terms that: &#8220;Directors shall be liable to the company, to the shareholders, and to the company&#8217;s creditors for the damage caused by acts or omissions contrary to the law or the bylaws, or by those carried out in breach of the duties inherent to the performance of their duties, provided that there is intent or negligence involved.&#8221;<\/p>\n<p>We therefore observe that liability arises from a breach of the obligations prescribed by law, or from the failure to perform the tasks specified under the umbrella of the duty of diligence and the duty of loyalty regulated by Articles 225 and 227, respectively.<\/p>\n<p>In this regard, case law and legal doctrine have distinguished between damages caused to the company, or to partners or third parties, generally creditors; and in the latter case, whether the injury is direct or indirect, in the sense of being a derivative effect of the damage caused to the company.<\/p>\n<p>Supreme Court Ruling 312\/2010 of June 1 states: &#8220;The actions of directors may harm, more or less directly and immediately, the interests of the company and, in a reflected or indirect manner, on the one hand, those of the partners and, on the other, those of creditors who rely on the company&#8217;s assets as collateral for the effectiveness of their claims. (&#8230;) Furthermore, it may directly harm the interests of partners or third parties without necessarily harming the interests of the company.&#8221;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter  wp-image-9711\" src=\"https:\/\/www.navarrollimaabogados.com\/wp-content\/uploads\/2025\/03\/Captura-de-pantalla-2025-03-26-094555.png\" alt=\"\" width=\"503\" height=\"321\" srcset=\"https:\/\/www.navarrollimaabogados.com\/wp-content\/uploads\/2025\/03\/Captura-de-pantalla-2025-03-26-094555.png 605w, https:\/\/www.navarrollimaabogados.com\/wp-content\/uploads\/2025\/03\/Captura-de-pantalla-2025-03-26-094555-300x191.png 300w\" sizes=\"auto, (max-width: 503px) 100vw, 503px\" \/><\/p>\n<p>&nbsp;<\/p>\n<p>Therefore, to fully understand the difference between both types of instruments for claiming liability, we must consider:<\/p>\n<p>1. when each action is appropriate;<\/p>\n<p>2. what their purpose is;<\/p>\n<p>3. how each one is structured.<\/p>\n<h3>1. SOCIAL ACTION<\/h3>\n<p>Beginning with the corporate action (<strong>238 LSC<\/strong>), this action arises when the directors are sought to be held liable for damages directly caused to the company. It is aimed at restoring its assets by compensating for <strong>the loss of assets caused by the director&#8217;s unlawful conduct<\/strong>. The method of executing it begins with the company, through a resolution of the general meeting adopted by an ordinary majority. If the company fails to act within one month or the meeting rejects the demand for liability, shareholders with sufficient participation may exercise it, and may even exercise it directly if it is based on a breach of the duty of loyalty. Finally, creditors may initiate proceedings if neither the company nor the partners have exercised it and the company&#8217;s assets are insufficient to cover their claims.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter  wp-image-9721\" src=\"https:\/\/www.navarrollimaabogados.com\/wp-content\/uploads\/2025\/03\/Captura-de-pantalla-2025-03-26-095507.png\" alt=\"\" width=\"437\" height=\"291\" srcset=\"https:\/\/www.navarrollimaabogados.com\/wp-content\/uploads\/2025\/03\/Captura-de-pantalla-2025-03-26-095507.png 604w, https:\/\/www.navarrollimaabogados.com\/wp-content\/uploads\/2025\/03\/Captura-de-pantalla-2025-03-26-095507-300x200.png 300w\" sizes=\"auto, (max-width: 437px) 100vw, 437px\" \/><\/p>\n<h3>2. INDIVIDUAL ACTION<\/h3>\n<p>On the other hand, individual action (<strong>Article 241 of the LSC<\/strong>) can be applied when the director&#8217;s conduct has <strong>caused direct harm to the partners or third parties<\/strong>, who are usually creditors. It seeks to compensate these parties for the damage directly suffered by their assets, requiring the following: 1. a negligent act by the director or a neglect of their duties; 2. direct harm to the assets of the creditors or plaintiff partners; and 3. a cause-and-effect relationship between the former and the latter. It is carried out in the ordinary manner provided for claiming civil liability.<\/p>\n<p>At this point, one issue should be noted: it is often the case that the director&#8217;s negligent conduct that causes direct harm to the company can, in a reflective or indirect manner, harm the assets of the partners or other creditors.<\/p>\n<p>A different matter is the action for liability for losses, which arises from Article <strong>367 of the LSC<\/strong>: &#8220;1. Directors who fail to comply with the obligation to call a general meeting within two months of the occurrence of a legal or statutory cause for dissolution or, in the case of a subsequent appointment, from the date of acceptance of office, to adopt, where appropriate, the resolution of dissolution or any resolutions necessary to remove the cause, as well as those who do not request judicial dissolution within two months from the date scheduled for the meeting, when the meeting has not been constituted, or from the date of the meeting, when the resolution was contrary to dissolution, shall be jointly and severally liable for the company&#8217;s obligations subsequent to the occurrence of the cause for dissolution or, in the case of appointment at or after that meeting, for the company&#8217;s obligations subsequent to the acceptance of the appointment.&#8221;<\/p>\n<p>Since a reduction in net worth to less than half of the share capital is one of the legal grounds for dissolution, we find that accumulated losses can lead to directors becoming liable for the company&#8217;s debts.<\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-9714\" src=\"https:\/\/www.navarrollimaabogados.com\/wp-content\/uploads\/2025\/03\/istockphoto-171573694-612x612-1.jpg\" alt=\"\" width=\"423\" height=\"282\" srcset=\"https:\/\/www.navarrollimaabogados.com\/wp-content\/uploads\/2025\/03\/istockphoto-171573694-612x612-1.jpg 612w, https:\/\/www.navarrollimaabogados.com\/wp-content\/uploads\/2025\/03\/istockphoto-171573694-612x612-1-300x200.jpg 300w\" sizes=\"auto, (max-width: 423px) 100vw, 423px\" \/><\/p>\n<p>The statute of limitations for these actions is regulated by Article 241 Bis LSC: &#8220;Actions for liability against directors, whether corporate or individual, shall expire four years from the date on which they could have been brought.&#8221;<\/p>\n<p>Although at first glance it may seem simple, the case law and jurisprudential interpretations of each of these points are so diverse that they regularly become a central topic in commercial forums among lawyers, as they evolve year after year.<\/p>\n<p>We will attempt to analyze each of them in detail in future posts.<\/p>\n<p>At <a href=\"https:\/\/www.navarrollimaabogados.com\/en\/\">Navarro LLima Abogados<\/a>, we have a long and successful track record in this area and are experts in the prosecution and defense of these types of actions. Do not hesitate to contact us.<\/p>\n<p><strong>Thank you for your time!<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Within legal entities, there are often different parties with different responsibilities who are expected to exercise due diligence in the performance of their duties. Failure to perform their duties properly exposes them to potential personal liability. In this post, we will focus on corporate directors&#8230;<\/p>\n","protected":false},"author":2,"featured_media":9732,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1182],"tags":[],"class_list":["post-9797","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-sociedades-en"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Social and individual action of administrators&#039; responsibility - Navarro Llima Abogados<\/title>\n<meta name=\"description\" content=\"Within legal entities, there are often different parties with different responsibilities who are expected to exercise due diligence in the performance of their duties. 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