Civil legal liability of the company administrator. Study of doctrine and jurisprudence

Abbreviations / 9

Summaries of the PhD Thesis chapters / 11


Head. I. Legal liability of the company administrator / 15

Section I General aspects regarding the legal liability of the company administrator / 15

1. The importance of the legal liability of the administrator / 15

2. Forms of legal liability of the administrator / 16

2.1. Civil liability / 17

2.2. Contraventional liability / 19

2.3. Criminal liability / 19

Section II Civil legal liability of the company administrator / 20

1. Civil liability of the administrator of the company. Delimitation from the civil liability of the legal person / 20

2. The legal nature of the civil liability of the administrator / 23

3. Forms of patrimonial civil liability of the administrator / 25


Head. II. Sanctions specific to the civil legal liability of the administrator of the company / 32

Section I Sanctions specific to the patrimonial liability of the administrator / 32

&1. Obligation to pay compensation / 32

1. Legal basis of the obligation / 32

2. Conditions for granting compensation. Criteria for assessing the administrator 's fault / 33

3. Assessment of damages / 38

& 2. Solidarity of the responsibility of the administrators / 41

Section II. Sanctions specific to the non-patrimonial liability of the administrator / 46

&1. Revocation of the administrator / 46

1. Legal nature of the revocation / 46

2. The decisional competence of the administrator's revocation / 50

4. Legal effects of the revocation from the position of administrator / 62

5. The limits of the judicial control over the revocation decision / 66

&2. Revocation of the presidents of the collective administration bodies. Particularities / 74

&3. Revocation of the directors of the joint stock company. Particularities / 76

&4. Revocation of the legal entity administrator / 77

&5. Exclusion of the associate administrator / 80


Head. III. Liability action of the administrator of the company / 82


Section I. Particularities of the liability action of the company administrator / 82

1. General considerations regarding the action in liability / 82

2. The action in responsibility of the general assembly (social action) / 87

2.1. The legal regime derogating from the provisions of art. 155 of the law / 87

2.2. Competence to decide to promote responsible action. Quorum and majority conditions necessary for the adoption of the decision / 90

3. The action for damages of the minority shareholders (social action ut singuli) / 93

4. Procedural aspects in the action in liability / 96

4.1. Procedural quality in liability action / 96

4.2. Object of the action in liability / 97

4.3. Procedure for settling liability action / 98

5. Aspects of comparative law regarding the action in liability / 101

Section II a. Cases that remove the civil liability of the company administrator / 103

1. General causes that remove the civil liability of the administrator / 103

2. Rule of business judgment exonerating case of liability / 107

2.1. The legal nature of the “business judgment” rule / 107

2.2. Scope of the "business judgment rule" / 111

2.3. Applicability conditions of the “business judgment rule” / 112

2.4. The legal effects of the “business judgment rule” / 114


Head. IV. The civil liability of the administrator towards the company / 116

Section I. The direct civil liability of the administrator towards the company / 116

&1. The basis of liability / 116

&2. Cases of direct responsibility of the administrator towards the company / 117

1. The responsibility of the administrator for the non-execution of the preliminary obligations for the establishment of the company. Applicable sanctions / 117

1.1. Obligation to apply for company registration / 117

1.2. Obligation of the administrator, appointed representative of the company, to submit the signature to the Trade Register / 119

1.3. Obligation to conclude a professional liability insurance / 122

2. The responsibility of the administrator for not executing the legal formalities for setting up the company. Applicable sanctions / 124

2.1. The obligation to remedy the irregularities regarding the establishment of the company / 124

2.2. The obligation to take over from the founders the documents and the correspondence regarding the constitution of the company / 129

3. The responsibility of the administrator for not fulfilling the obligations regarding the current activity of the company. Applicable sanctions

3.1. Obligation to manage the company / 130

3.2. The obligation to convene the general assembly of the associates / 141

3.3. The obligation to follow the execution by the associates of the due payments / 148

3.4. The obligation to answer for the reality of the dividends paid / 150
3.5. The obligation to keep the registers provided by law and to follow the correct execution of the evidences and mentions from these documents / 151

3.6. The obligation to carry out the decisions of the general assembly as well as of the duties countries provided by law or by the articles of association / 157

4. The responsibility of the administrator for not fulfilling the legal obligations. Applicable sanctions / 157

4.1. The obligation to inform the associates regarding the activity of the company / 158

4.2. The obligation of fidelity towards society / 163

4.2.1. Non-compete obligation / 163

4.2.2. The obligation of loyalty / 73

4.3. Obligation of prudence and diligence / 182

4.3.1. The concept of obligation of prudence and diligence / 183

4.3.2. The content of the obligation of prudence and diligence / 184

4.4. Obligation of confidentiality / 188
5. The responsibility of the administrator for the fraud committed to the detriment of the company. Applicable sanctions / 191

5.1. Preliminary details / 191

5.2. The concept of "fraud to the detriment of society" / 193

5.3. Delimitation of "fraud to the detriment of society" from abuse of power / 203

5.4. Sanctions applicable to the managing partner in case of fraud / 206

6. The liability of the administrator for the damage of credibility brought to the company as a result of the loss of honorability. Applicable sanctions / 211

7. The responsibility of the administrator in the dissolution and liquidation phase of the company. Applicable sanctions

7.1. Negative obligation not to undertake new operations from the moment of dissolution / 214

7.2. The obligation of the administrators to continue their mandate until the liquidators take office / 216

7.3. The obligation to prepare the management of the company in order to hand it over to the liquidators / 217

7.4. Obligation to hand over the management of the company to liquidators / 218

8. The responsibility of the administrator in the phase of merger or division of the company. Applicable sanctions / 220

8.1. Obligations of the administrator in the merger or division phase of the company / 220

8.1.1. Obligation to prepare and submit the merger or division project / 220

8.1.2. The obligation to inform the associates regarding the opportunity and the consequences of the merger or division / 222

8.2. Liability of administrators for irregularities committed in merger or division operations / 224

Section II. Indirect civil liability of the administrator for the deed of another person / 225

&1. The foundation of responsibility / 225

&2. Cases of indirect liability of the administrator for the deed of another person / 226

1. Civil liability for the deeds of subordinate personnel / 226

2. Civil liability for the deeds of the administrators who preceded him in office / 228

3. Joint and several liability of the first directors and founders in the case of joint stock companies established by public subscription / 230

Section III. The "regress" civil liability of the administrator towards the company / 231

&1. The foundation of responsibility / 231

&2. Cases regarding the "regress" liability of the administrator towards the company / 234

1. The responsibility of regress in the hypothesis of the legal acts and facts concluded by the administrator / 234

2. The “regression” liability of the administrator in case of non-fulfillment of some legal obligations / 238


Head. V. Civil liability of the administrator of the company towards third parties / 242

Section I. The basis of the liability of the company administrator towards third parties / 242

Section II. Cases of liability of the administrator towards third parties / 244

&1. The responsibility of the administrator for the documents and operations concluded during the incorporation of the company / 245

&2. Responsibility of the administrator in case of exceeding the limits of the powers (function) entrusted / 249

1. Preliminary clarifications / 249

2. Limits imposed by the object of activity of the company / 251

3. Statutory limits imposed by the constitutive act, by the decisions of the general assembly or decisions of the administrative bodies / 257

4. Limits imposed by law / 266

5. Limits imposed by the social interest / 272

6. Aspects of comparative law / 273

&3. Liability of the administrator as guarantor of the company / 274


Head. VI. Civil liability of the administrator of the company in the insolvency procedure / 279

Section I. Legal framework of the administrator's liability in insolvency proceedings / 279

1. The need to regulate the liability of the management and / or supervisory bodies in the insolvency procedure / 279

2. Persons required to answer in insolvency proceedings / 282

2.1. The persons expressly provided by art. 138 of the Insolvency Law / 282

2.2. Specific issues regarding the liability of the members of the management bodies according to art. 138 of the Insolvency Law / 285

2.3. Liability of the legal person administrator in the insolvency procedure / 290

2.4. Aspects of comparative law / 290

Section II. Legal nature of the liability of the administrator of the company in the insolvency procedure / 293

Section III. The conditions of the civil liability of the administrator of the commercial company in the insolvency procedure / 297

1. Premises of liability / 297

2. The facts generating damages / 300

3. Existence of the damage and its extent / 317

4. The causal relationship between the deed and the damage / 322

5. The fault of the members of the management bodies / 328

Section IV. The action in liability of the administrator of the commercial company in the insolvency procedure / 330

1. Holders of the liability action / 330

1.1. Preliminary details / 330

1.2. Judicial administrator / liquidator / 333

1.3. Chairman of the creditors' committee. The individual creditor / 336

2. Prescription of the material right to liability action / 340

3. The effects of establishing the liability of the members of the management bodies in the insolvency procedure / 347

3.1. Insurance measures on the assets of the management bodies / 347

3.2. Enforcement of the court decision ordering the liability of the members of the management bodies / 350

4. Cumulation of the liability of the members of the management bodies regulated by the Insolvency Law with other forms of liability / 356

4.1. Cumulation of civil liability based on the Insolvency Law with common law liability, provided by the Companies Law / 356

4.2. Cumulation of civil liability based on the Insolvency Law with criminal liability / 357


CONCLUSIONS AND PROPOSALS of lege ferenda / 360

BIBLIOGRAPHY / 370

The paper "Legal liability company manager" has a wide range of social, legal implications affecting them both on the right specialists (academics and practitioners) and any company manager, is a true guide of his conduct, to avoid legal liability. At the same time, it is necessary and appropriate. Necessary as systematically gathers, doctrine and practice, being a good research base and deepening of civil liability of the administrator. Appropriate, as is done in a time when the market economy in Romania has entered a mature phase, the stage managers of companies (in fact, companies are major operators) should materialize responsibilities that they assume within each legal relationship you establish the company name given.

During this work we tried to provide a broad overview of the complex issues of civil liability company manager, the more so as, provisions of the new Civil Code - Law no. 287/2009 introduced new rules on the stage of Romanian law, directly applicable to the company manager. In essence, the book is a journey on controversial doctrinal opinions, "doubled" the solutions offered by the courts, where possible, recent (including interest of the law on liability issues manager, fragmented solved in practice, decisions Constitutional Court on the unconstitutionality of these laws with implications in the analysis), offering the solution that I considered to be appropriate.

As the administrator responsible companies is well determined by law, from the moment the company is incorporated, continued with its operation and administration, by dissolution and liquidation phase, we considered useful to analyze and obligations of the administrator, in all stages of life society, underlining its tort or contractual liability in case of failure, considering sanctions, and even proposing, where we were allowed, modification of legal texts in this respect, filling gaps law and "eliminate any inaccuracies legislative ".

Regarding the responsibility of the management of the company in insolvency proceedings, is covered and this period of life of companies, with specific consequences, according to the regulations contained in Law no. 85/2006, as amended. The paper includes an analysis of the actual opinions in the literature and practical legal solutions in matters of insolvency administrator on issues of liability conditions, gave an analysis of each illegal acts, in part, provided by art.138, with specific and position supporting or criticizing the legal literature and judicial practice in the field.

           

The author

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Throughout this thesis we have been trying to offer a vast overview of the complex area of the company administrator’s civil legal liability. Essentially, the thesis is a reflection on the controversial doctrine opinions, „doubled” by the solutions offered by the legal instances, which are as recent as possible (including the appeals in the law interest regarding some problems related to the administrator’s liability, without unitary solutions in practice, as well as the decisions of the Constitutional Court regarding some unconstitutionality exceptions of the law texts interconnected with the analysed domain), also offering the solution we have considered adequate.

Chapter I and II are focused on the legal liability, having as main character the company administrator and presenting an overview of the liability forms, the principle of the liability solidarity, the sanctions specific to both the administrator patrimonial liability (the obligation of paying remedies), and non-patrimonial liability: the administrator revoking, the problems occurring in the legal practice (decision-making competence, the effects and the juridical control of the revoking decision).

The chapter III includes a detailed analysis of the administrator liability action (categories, special characteristics, procedural aspects, including elements of compared law and tangentially debating the difficulty of its arbitration), and of the liability exoneration cases, in this domain the “business judgement rule” being relevant.

Chapter IV and V are dedicated to the company administrator civil liability for the company and for the third parties. In the case of the liability for the company, three forms of liability are analysed in details: direct liability for inobservance of the contractual obligations (in the memorandum of association, in the board general meeting decision which assigned the functions, and ... why not, in the contract concluded with the company) and legal obligations, indirect liability or the guarantee for the action of a different person, and the regression liability; all these are presented together with their legal fundamentals and the cases where they apply.

Taking into account the fact that the company administrator has got obligations well-defined by the law, starting with the moment when the company is set up, and continuing with the company functioning and administration, until the phase of dissolution or liquidation, we have considered useful to analyse the administrator obligations in all the company existence phases, underlining the delinquent or contractual character of the administrator liability in case of inobservance, analysing the sanctions to be applied, and even proposing, where we were permitted, the modification of some law texts regarding these aspects, completing the law lacunae, „eliminating possible legislative inconsistencies”. One important part of the chapter refers to the administrator liability for the fraud committed against the company and we have been trying to propose solutions for a series of problems regarding the definition of the expression „fraud against the company”; the discrimination between the fraud and the power abuse, as well as the relation between the sanctions for the exclusion and revoking of the associate administrator, namely when his exclusion applies and when his revoking applies.

Contrary to the opinions expressed in the doctrine, the administrator commits to the contractual or delinquent liability for the third parties, thus representing one of this thesis objectives. The analysis of this form of liability is even more necessary due to the fact that the law regulates a series of cases where the administrator directly commits to his liability for the third parties. The complexity of the issue of the administrator liability for the third parties for the actions and operations done during the company set up, in case of abusing the assigned function limits, or as the company guarantor, has been analysed at the end of this chapter.

Chapter VI is dedicated to the administrator liability in the insolvency procedure and it presents the problems regarding the qualification of the company administrator by the legislator as „managing body”, the conditions of committing to the liability (illicit facts expressly regulated, the prejudice and its dimensions, causality relation and the managing bodies culpability), also defining two requisites, without which, the liability according to Article 138 in the Insolvency Law no 85/2006, with its subsequent modifications, cannot apply: the open insolvency procedure and the insufficiency of the debtor’s assets – company. Moreover, the liability action is analysed (titular and legal effects), the problems occurred in practice compared to the guaranteeing measures of the assets of the managing representatives and the process of implementation of the legal decisions stipulating the commitment to the liability. Under these circumstances two types of the administrator liability can be identified: as managing representative: with a direct liability for the company, and a second also direct liability for the prejudiced creditors committee, i.e. for the creditor holding more than half of the claims value. In return, the compensation of the prejudice of the social creditors paid by the managing representative shall be done indirectly by covering one part of the company debts.

The chapter contains a real analysis of the opinions expressed in the speciality literature of the solutions in the legal practice for the administrator liability problem in case of insolvency, and, at the same time, it represents a reflection on the opinion expressed in the doctrine on the administrator liability in case of insolvency (contractual liability, aggravating, and direct, for the company, (not for the third parties) – opinion which we do not agree with. Therefore, we have been trying to recalibrate the legal character of the administrator liability in case of insolvency, proposing its definition as a special form of civil delinquent liability, both for the company and for the creditors.

At the end of the thesis the CONCLUSIONS and the Proposals of “de lege ferenda” are defined, with the mention that a series of proposals of “de lege ferenda” have been made throughout the thesis, where possible, related to a personal consideration, or to some legislative inconsistencies, followed by the corresponding reflections on the respective legal provisions.