The social action and the individual action liability of directors of a corporation

The social action of responsibility

The social action, described in section 238 LSC, is one that enables society to act against the directors for compensation of damages incurred by the social equity arising from the breach of duties imposed on them under the Act, Statutes or the duty to manage the diligence with the orderly and fair administrator.

The Spanish legal system of liability of directors is arranged on the basis of a double standard. On one hand, we have the responsibility for damage to the assets of the company which may be required by the corporation itself (social action) and secondly no responsibility for damage caused directly in equity partners or third party liability will enforceable through individual action. The consequence of this distinction is that in the course of social action for damages , compensation or the compensation you get will be incorporated in the social heritage of society , while in the case of individual action , the economic pillar go accomplished to stop at the heritage of the particular partner or judgment creditor .

Therefore, the social action aims to protect and defend the assets of the company from damage or injuries that the wrongful act or omission , or deadbeat antiestatutarios the duties of administrators have led directly thereon (Article 236.1 LSC) . The damage to the assets must come from an illegal or unlawful performance of managers , whether an act or omission , provided that no such prior obligation, express or derived from a general duty behavior . Besides the wrongful act attributable to managers must be guilty and must be a causal link , the latter understood as the causal relationship between the unlawful conduct of managers and damage .

The protective purpose of the social heritage that brings legitimacy to the exercise of social responsibility action is attributed primarily to the company , the agreement of the general meeting , second , and alternative, to partners in as holders of a beneficial interest in defending the social heritage, and thirdly to the company's creditors , since it must not be forgotten that these have social equity as collateral for its loans and would be hurt with that suffered decline . For the sake of the partners of the company have a subsidiary legitimacy and can do so in two ways. First, shareholders representing at least 5% of the share capital may request the convening of the general meeting for a decision on the exercise of the share of the responsibility . Secondly, they may also jointly file an action for liability in the company's interests when managers do not convene a general meeting for that purpose , when society not brought within a period of one month from the date of adoption of relevant agreement, or when the latter has been contrary to the requirement of responsibility.

Finally, it is necessary to refer to the prescription social responsibility action . For some time the Supreme Court has granted that corporate liability action , despite the absence of specific corporate standard, shall lapse four years starting from the date on which the administrator had left office .

The individual action of responsibilities

It regulated in Article 241 LSC is the action that goes to compensation for direct damages partners or third parties may suffer as a result of negligent breach of the duty of care which the law imposes on directors , in the exercise of his office . The same article emerges clearly the criterion for distinguishing between the two classes of shares: equity impinging on the harm caused by the conduct of managers . If the injured is social heritage, the action shall be instituted which is social, while in the event that directly injure the interests of members and third parties come into play individual action. The doctrine of the Supreme Court (STS 14.3.2007 and 27.11.2008 ) reiterated in several judgments that " while the object of social action is to restore the heritage of society through individual action is the damage in the assets of the partners or third parties. "Consider third party creditors , governments, and even employees, as likely to be directly affected by the performance of managers .

The requirements to be met for the appropriate exercise of this action are:

A direct damage or injury to the interests of the perpetrator , in the sense of direct impact of the damage on equity partner or third party, other than a mere reflection of the eventual damage to the company's assets.
Negligent conduct in the performance of his duties by administrators.
A causal relationship between the negligent conduct and the damage , ie the damage occurs as a result of acts performed by the administrator to be carried out without the care which must play the position .
In addition , all third parties to exercise individual responsibility to action regarded legitimized , who holds an expired , liquid and payable debt is required. A typical behavior in which the existence of the liability of directors to cause direct damage to third parties , it is claimed is the progressive indebtedness of society knowing its insolvency. However, it is important to note that at no time the responsibility for the fact that the wrongful act or agreement has been approved, authorized or ratified by the General Meeting disappears.

Finally, entering the issue of prescription, the exercise period for actions against partners, managers and administrators of companies , is 4 years , under Article 949 of the Commercial Code .