Even if the limited liability companies are of interest to their associates because it gives them a certain protection in the sense that they are liable only within the limit of the contribution to the share capital, for the company’s administrators things are a little different.
The administrators may perform all the operations required to carry out the activity of the company, except for the restrictions shown in the articles of incorporation and are obliged to take part in all meetings of the company, boards of directors and similar management bodies (if any).
The administrator of a company operates based on the provisions from the mandate agreement and the special ones provided by Law 31/1990, not being necessary the existence of an agreement that would regulate his rights and obligations. Regarding his own activities carried out within the company, he can be held responsible for the followings:
a) the reality of the payments made by the shareholders;
b) the real existence of the dividends paid;
c) the existence of the registers required by law and their correct keeping;
d) exact fulfillment of the decisions of the general meetings;
e) the strict fulfillment of the duties that the law, the constitutive act impose;
The law also stipulates that administrators are liable to the company for damages caused by acts performed by directors or staff, when the damage would not have occurred if they had exercised the supervision imposed by their duties and are jointly liable with their predecessors if, being aware of the irregularities committed by them, he does not communicate to the auditors or, as the case may be, to the internal auditors and the financial auditor, all these provisions being found in the Companies Law, but there are other regulations that stipulate that the company’s management bodies are liable for their own deeds.
For example, Law 85/2014 on insolvency prevention procedures offers the possibility for the judicial administrator or the judicial liquidator to bring an action against the former administrators of the company by ordering that a part or the entire liability of the debtor, without exceeding the causal damage related to the respective deed, to be borne by the members of the management and / or supervisory bodies within the company, as well as by any other persons who contributed to the debtor’s state of insolvency, through one of the following actions:
a) used the goods or credits of the legal person for their own benefit or that of another person;
b) have carried out activities of production, trade or provision of services in personal interest, under the cover of the legal person;
c) ordered, in their personal interest, the continuation of an activity that led, obviously, the legal person to the cessation of payments;
d) they kept a fictitious accounting, they made some accounting documents disappear or they did not keep the accounting in accordance with the law. In case of non-delivery of the accounting documents to the judicial administrator or the judicial liquidator, both the fault and the causal link between the deed and the damage are presumed. The presumption is relative;
e) they have misappropriated or concealed a part of the legal person’s assets or have fictitiously increased its liabilities;
f) used ruinous means to procure funds for the legal person, in order to delay the cessation of payments;
g) in the month preceding the cessation of payments, they have paid or are willing to pay with preference to one creditor, to the detriment of the other creditors;
h) any other deed committed with intent, which contributed to the debtor’s state of insolvency, ascertained according to the provisions of this title.
Including the Fiscal Procedure Code provides in art. 25 that the following persons are jointly and severally liable with the debtor: associates from the associations without legal personality, including the members of the family enterprises, for the fiscal obligations due by them, under the conditions provided in art. 20, together with the legal representatives who, in bad faith, determined the non-declaration and / or non-payment of the fiscal obligations at maturity.
Therefore, analyzing the legal provisions listed above, the law does not give the persons empowered to fulfill the object of activity the same limit on personal liability. As can be seen, any activity that is contrary to the company or is performed in bad faith can lead to the prosecution of the administrators for the damages caused to the company.