Practice areas
Liability of management board members, shareholders and partners
Legal assistance concerns the liability of current and former management board members, of shareholders and of partners: claims directed against private assets, liability towards the company, and the consequences of insolvency. The second type of matter is shareholder and partner disputes — over resolutions, access to information and the right of inspection, the exercise of corporate rights, and the company's continued functioning. The basis and extent of liability depend on the company's legal form, on the status of the particular person, on the period during which the office was held or during which the person was a shareholder or partner, and on the type of claim. Assistance may concern a person defending against liability, a company pursuing compensation for loss, a shareholder or partner in dispute, or a creditor pursuing a claim against a person connected with the company.
Legal assistance to management board members, shareholders, partners and companies
Whether a member of a company's body, a shareholder or a partner is also liable for an obligation connected with the company's activity depends on the company's form and on the basis from which the claim is derived. The mere fact of holding office or of participating in the company is not enough to determine the basis and extent of a particular person's liability. Account must be taken of the company's legal form, of that person's status, of the source of the obligation and of the period to which the matter relates.
A creditor's claim connected with an unsatisfied obligation of the company is of one character, the company's own claim for compensation for loss is of another, and a matter concerning tax or social security arrears is of yet another. Each of these situations rests on different conditions, covers a different range of persons and refers to different events from the period during which the office was held. Where, on the other hand, a personal obligation arises from a surety, a guarantee or another form of security granted independently of the office in the company, the status of management board member, shareholder or partner is not in itself the source of liability.
An unfavourable outcome of a business decision does not in itself determine the liability of the person who took it. In matters concerning loss caused to the company, account must be taken of the scope of that person's competences, of the information available at the time of the act, of the way the decision was prepared, of the standard of diligence required, and of whether the act fell within the limits of justified business risk.
The chronology requires particular attention where a company loses the ability to meet its obligations. What is important is when the financial problems became permanent, what information the members of the company's bodies had, and what steps were taken in response to the deteriorating situation. Later bankruptcy, restructuring or the ineffectiveness of enforcement may lead to decisions taken much earlier being examined.
Shareholder and partner disputes have a different subject matter: the position of a shareholder or partner in the company and the way their rights are exercised. They may concern access to information, the right of inspection, participation in decision-making, resolutions, shares, settlements, the exclusion of a shareholder, or a lasting conflict that impedes the company's continued functioning.
Company debts
Liability for the company's obligations
Claims directed against current and former management board members and against shareholders and partners — for the company's civil-law obligations, its tax arrears or its social security contribution liabilities — where there is a basis for personal liability.
Liability towards the company
Decisions, loss and the duties of members of the company's bodies
Claims connected with the way an office was performed, with a breach of duties towards the company, with causing loss, and with decisions taken in circumstances involving business risk.
Insolvency
A crisis situation and the moment of response
A company's deteriorating financial situation, the steps taken by the persons managing it, and the consequences of subsequent insolvency.
Shareholder and partner disputes
Corporate rights, resolutions and ownership conflict
Disputes over access to information and the right of inspection, the exercise of voting rights and participation in profit, resolutions, shares, settlements, and the company's continued functioning.
When can I help?
01
The company has not paid and enforcement has produced no result
A failure to obtain satisfaction from the company's assets may justify checking whether the creditor has a basis for directing the claim against another person. Not every person connected with a company is, however, liable for its debts. It is therefore necessary to check the company's form, the type of obligation, the course of the earlier pursuit of the amount due, and the status of the person against whom the demand would be directed.
02
You have received a demand for payment as a current or former management board member
Where a demand, a statement of claim, a decision of the tax authority or a letter from the Social Insurance Institution is received, the first thing to check is the basis on which liability is to be directed against the particular person. What may matter is the period during which the office was held, the nature of the amount due, the company's situation and the steps taken during the period to which the claim relates.
03
The company alleges that you caused it loss while holding office
An unfavourable outcome of a decision does not in itself determine liability. In such a matter, what has to be reconstructed is the scope of the duties, the information available, the way the act or omission was prepared, and the circumstances in which the decision was taken. The same analysis is needed by a company that is only considering bringing such a claim.
04
The company's financial situation is deteriorating rapidly
The company stops meeting some of its obligations, and the management board has to take successive decisions without yet knowing whether the difficulties are temporary. Later, in assessing those decisions, the chronology of events and the information available at the time prove to be decisive.
05
A creditor is directing a claim against your assets as a shareholder or partner
The extent of liability depends on the type of company and on the status of the shareholder or partner — it is different in a general partnership and different in a limited liability company. Before responding to the demand, it is necessary to check whether personal liability arises at all, what its extent is, which period it relates to and how the creditor may pursue it.
06
As a shareholder or partner, you cannot obtain information or exercise your rights
The dispute may concern access to the books or documents, the right of inspection, participation in a meeting, voting, profit or another entitlement arising from the status of a shareholder or partner. What to do next depends on the type of company, on the content of its documents and on the steps already taken by that shareholder or partner and by the company.
07
A dispute has arisen over a resolution, discharge or the exclusion of a shareholder
A resolution may affect a shareholder's rights, the position of a member of a company body or the company's continued functioning. Its content, the manner in which it was adopted and its effects must first be determined, and only then can the way of challenging it — or of defending against such a demand — be considered.
08
The shareholders are locked in a lasting conflict
A deadlock, a dispute over shares, the performance of a shareholders' agreement, the exit of one of the parties, or the inability to take basic decisions may require a solution going beyond a single resolution. In such a situation, the parties' corporate rights have to be set against the question whether the joint undertaking is to continue or to be brought to an end.
Scope of assistance
A claim directed against a management board member or another person connected with the company is not a simple extension of the company's own debt. It must first be checked whether, given the type of company, the type of amount due and the person's status, there is an independent basis for personal liability, and what period and what circumstances are relevant to it.
- a creditor's pursuit of a claim against a current or former management board member for the company's obligations;
- defence against a demand for payment of the company's debt directed at a management board member, a former management board member or a liquidator;
- analysis of the earlier pursuit of the amount due and of the ineffectiveness of enforcement against the company, where this forms an element of the basis of the claim;
- linking the obligation to the period during which the office was held, to a change in the composition of the body, to a resignation, removal or the liquidation of the company;
- analysis of the circumstances capable of excluding or limiting personal liability, and of the steps taken in connection with the company's financial situation;
- liability for the company's tax arrears, where the tax authority directs it at a management board member or at a shareholder or partner whose status may form the basis of such liability;
- liability for social security contribution liabilities and matters in which the Social Insurance Institution directs a demand at a person connected with the company.
A member of a company body may be liable to the company itself for loss connected with the way the duties were performed. Such a matter has to be assessed from the perspective of the conditions existing at the time of the act, and not solely through its later outcome.
- the company's pursuit of compensation for loss caused by a member of a company body or by a liquidator;
- defence against a claim connected with an allegation of a breach of duties towards the company;
- reconstruction of the actual division of competences, duties and responsibility between the persons managing or supervising the company's affairs;
- analysis of the information, documents, opinions and other materials available when the challenged decision was taken;
- matters concerning the required diligence, loyalty towards the company and conflicts of interest;
- decisions taken in circumstances involving business risk and the way they were prepared;
- liability connected with making an impermissible payment out of the company or with another breach of the rules protecting its assets;
- the liability of several persons for the same loss and the subsequent settlements between the persons who bore its burden;
- the effect of resolutions of the company's bodies, of discharge, of a waiver of claims or of earlier settlements on the liability being pursued.
A company's insolvency does not in itself determine the personal liability of a management board member. What becomes crucial, however, is the moment at which the situation deteriorated, the information available at that time and the steps taken in response to the financial problems.
- establishing the moment at which the company's financial difficulties ceased to be temporary and began to affect the scope of the management board's duties;
- reconstruction of the state of the obligations, payments, assets and other data relevant to the company's situation in a given period;
- assessment of the steps taken by the management board or by other persons managing the company's affairs during the period of mounting financial difficulties;
- the effect on personal liability of filing or not filing a bankruptcy petition, and of the time at which that step was taken;
- the effect of the restructuring steps taken on the position of the persons managing the company's affairs;
- damages claims connected with a failure to take the steps required in a situation of insolvency;
- matters concerning a ban on carrying on business activity or on holding particular offices, where they are connected with insolvency and with the conduct of the person managing the business's affairs;
- the position of a former management board member where the financial difficulties developed before or after that person ceased to hold office.
The status of shareholder or partner does not in itself give a single answer to the question of liability. In a limited liability company and in a joint-stock company, participation does not as a rule mean liability for the company's obligations, whereas in a civil-law partnership and in partnerships it depends on the structure of the particular company and on the status of the particular partner. Even in a limited partnership the partners' positions are not identical and not every partner is liable to the same extent.
- the liability of the partners of a civil-law partnership and of partnerships for obligations connected with the company's activity;
- establishing the extent of liability and the way it may be pursued, taking account of the status of the particular partner;
- defence of a shareholder or partner against a creditor's claim directed at their private assets;
- the effect of joining the company, of leaving it or of a change in the status of a shareholder or partner on liability for obligations from particular periods;
- disputes concerning the making, the value or the topping up of a contribution, and the performance of the obligation to make additional contributions;
- the obligation to return payments or other benefits received from the company where they were made in breach of the rules protecting its assets;
- the position of a person who combines the status of shareholder or partner with the office of a member of a company body and who may be liable on more than one basis;
- recourse settlements between shareholders or partners, or other persons who have borne the burden of the same obligation.
Not every conflict between shareholders or partners concerns liability for debts. The dispute may focus on who may exercise rights in the company and how, who may influence its decisions, obtain information or dispose of their share in the undertaking.
- refusal to provide a shareholder with information, explanations or access to the books and documents, and disputes concerning the exercise of the right of inspection;
- the exercise of voting rights, participation in a meeting and in profit, and other entitlements of a shareholder in a limited liability company or in a joint-stock company;
- challenging resolutions of the shareholders of a limited liability company or of a joint-stock company and defending the company against such a demand, including in matters concerning discharge;
- the exclusion of a shareholder, defence against a demand for exclusion, and disputes concerning the temporary restriction of the exercise of their rights;
- disputes over shares: their acquisition, disposal and encumbrance, the consent required, and who is entitled to the rights attaching to them;
- performance or breach of a shareholders' agreement and disputes connected with the admission of a new shareholder, with leaving the company or with the settlement of such a change;
- the pursuit by a shareholder of a limited liability company or of a joint-stock company, on the company's behalf, of a claim for compensation for the loss caused to it, where there are grounds for such a step;
- disputes between the partners of partnerships concerning the conduct of the company's affairs, participation in profit, the performance of duties towards the company, or the ending of participation;
- a lasting conflict or a deadlock preventing the company from functioning properly, including a dispute over its continued existence or its dissolution.
A matter may begin with a document received or with a conflict that has yet to require a formal response. The further steps should match both the basis of the problem and the current stage of the matter.
- analysis of the demand, statement of claim, resolution, decision or other document that gave rise to the need to act;
- preparation of a pre-litigation position, of a statement of claim, of a statement of defence or of another pleading appropriate to the type of dispute;
- representation of the company, of a member of a company body, of a shareholder, of a partner or of a creditor in proceedings concerning liability or corporate rights, including in appeal proceedings;
- representation in proceedings before the tax authority or the Social Insurance Institution, where the subject matter of the case is personal liability for the company's liabilities;
- preparation and presentation of the material concerning the period during which the office was held, the status of the shareholder or partner, the company's financial situation, the course of the decision-making or the exercise of corporate rights;
- preparation of an application for security, or of a position on such an application, where there are grounds for it;
- negotiations, mediation and preparation of a settlement of the dispute, where this matches the nature of the matter and the client's interests.
What to prepare
It is best to start from the document that gave rise to the current matter. This makes it possible to establish the current stage of the matter, the subject of the demand and the issues that may call for prompt action.
In liability matters, a chronology of offices and decisions is usually also needed: who held a particular role and during what period, what information they had and what steps they took. In shareholder and partner disputes, the points of reference are above all the articles of association or the statutes, the resolutions, the correspondence, the share documents and the materials showing how corporate rights have been exercised.
There is no need to identify the legal basis of liability yourself or to organise the documents according to the legal provisions. At the outset, what matters more is gathering the material that makes it possible to reconstruct the course of events, the status of the individual persons and the current state of the dispute.
Prepare or gather, if you can:
- the current demand, statement of claim, resolution, decision of an authority, letter from the Social Insurance Institution or other document with which the present matter began;
- the articles of association or the statutes, and the documents concerning appointments, removals, resignations or changes in the composition of the shareholders or partners and of the company's bodies;
- contracts, invoices, rulings and documents from the earlier pursuit of the amount due or from enforcement, if the matter concerns the company's obligations;
- financial statements, schedules of liabilities, payment data and other materials showing the company's financial situation in the relevant period;
- resolutions, minutes, notifications, correspondence, and analyses and opinions concerning the challenged decision or the disputed act;
- the shareholders' agreement and the documents concerning shares and the exercise of rights in the company;
- documents concerning liability insurance for persons holding office in the company, if such cover exists.
What the support involves
01 /
I establish the basis of liability or the subject matter of the dispute
I first determine what the problem arises from: the liability of a person connected with the company, or the exercise of a shareholder's or partner's rights. I also check the current stage and which side the client is on.
02 /
I reconstruct the chronology and the roles of the individual persons
I put the documents in order, along with the sequence of events, the periods during which offices were held, the changes in the company's structure and the decisions taken at the relevant time. In shareholder and partner disputes I analyse the way the rights have been exercised and the steps the parties have taken so far.
03 /
I assess the claim, the rights and the possible objections
I verify what has to be shown by the party pursuing the claim or challenging an act in the company, and which circumstances may support the defence. On that basis I set out the possible ways of proceeding.
04 /
I prepare the position and conduct the matter
I prepare the pleading or document needed and represent the client at the later stage. I make sure the position, the evidence and the successive steps remain consistent, and I report the decisions requiring the client's position.
Legal support for businesses and corporate matters
Where there is not yet a dispute or a claim and what is needed is the preparation or carrying out of a corporate step — a resolution, a shareholders' agreement, a change of structure, or ongoing legal support for the company.
Civil and commercial disputes
Where the essential problem is an ordinary claim for payment, for the performance of a contract, for damages or another pecuniary claim, and the particular status of a member of a company body, of a shareholder or of a partner is not decisive.
White-collar crime
Where the problem concerns the criminal liability of a management board member, a shareholder or partner, a manager or another person connected with the company's activity.
Tax law
Where the essential problem is the tax settlement itself, the amount of the liability, an audit or a decision concerning the company, rather than the personal liability of a management board member for its arrears.
Banking, finance and payment services
Where the source of the personal obligation is above all a surety or another form of security for financing — and not the office or status in the company.
Capital markets and investment services
Where the essential problem is the obligations of a public company, of a shareholder or of an investor arising from capital market regulation, rather than an internal corporate dispute or liability connected with holding office.
Contact
Discuss liability or a dispute between shareholders or partners
The first conversation makes it possible to establish whether the problem concerns personal liability, a claim against the company, insolvency or the exercise of a shareholder's or partner's rights, and which stage of the matter calls for a response. Get in touch to discuss your situation and establish the scope of the analysis needed.