!Корпоративное право 2023-2024 / 2013-study-analysis_en

Country	Does the	If yes, how are	Under what	Application to
	concept of the	de facto or	conditions are de	parent
	de facto or	shadow	facto or shadow	companies /
	shadow	directors	directors liable?	controlling
	director exist?	defined?		shareholders?
	Articles 2369		company (atti	company
	and 2030 Civil		dannosi per la
	Code		societa’). In this
			case, shareholders
			are jointly and
			severally liable with
			the de jure directors
			according to Article
			2476 (7) Civil Code
Latvia	No			No (unclear)
	not recognised in	-
	court practice
Lithuania	Yes			yes
	but only in	-	Recognised in case	in case of “undue
	relation to		of “undue intrusion”	intrusion”,
	“undue intrusion”		by shareholder;	controlling
	by shareholders		liability also applies	shareholder may
	into		for breach of	be treated as
	management		certain insolvency	member of
	affairs		related duties	management body
				for liability
				purposes
Luxembourg	Yes			Yes
	Recognised in	Fact-based	liability as for de	but only in limited
	case law and	analysis by the	jure directors	circumstances,
	scholarly writing	courts: positive		based on tort law.
		activity, carried
		out independently
		and freely, that
		results in directing
		the company, and
		that goes beyond
		advising the
		company
Malta	Yes			Yes
	Recognised in	Person carrying	liability as for de	In exceptional
	case law	out substantially	jure directors	circumstances;
		the same		exercise of control
		functions in		rights (i.e. voting)
		relation to the		will not suffice
		direction of the
		company as those
		carried out by a
		director
Netherlands	Yes			Yes
	statutory rules in	someone who	liability equivalent	in insolvency of
	relation to	(partly)	to de jure directors	company, under

51 Directors’ Duties and Liability in the EU

Country	Does the	If yes, how are	Under what	Application to
	concept of the	de facto or	conditions are de	parent
	de facto or	shadow	facto or shadow	companies /
	shadow	directors	directors liable?	controlling
	director exist?	defined?		shareholders?
	insolvency law;	determines the	special statutory	exceptional
	case law	policy of the	liability in case of	circumstances
	suggests wider	company as if	insolvency; also tax
	application	s/he was a	liability in certain
		director	circumstances;
Poland	unclear			unclear
	not addressed in	possibly parent	Unclear	possible under tort
	legislation and	company under		law, but situation
	no relevant case	exceptional		is unclear
	law	circumstances
	discussed in
	scholarly writing
	in relation to
	corporate groups
	and based on
	tort law
Portugal	Yes			Unclear
	statutory rules in	any person who,	Mainly relevant in	Application to legal
	relation to	without sufficient	insolvency context;	persons unclear
	insolvency law;	title, performs in	Criminal liability
	case law	an autonomous
			also applies to de
	suggests wider	way, either
			facto directors
	application	directly or
		indirectly,
		functions usually
		performed by de
		jure directors
Romania	Yes			Yes (unclear)
	Recognised in	persons who	Mainly relevant in	Possible liability
	case law	overwhelmingly	insolvency context	under tort law
		influenced the
		company’s
		activities
Slovakia	No			No
	Concept not	In limited cases,	Tort law-based	Only general tort
	generally	appointed	liability may exist	law liability
	recognised in	directors may be
	Slovak law	treated like
		directors before
		the appointment
		has formally
		become valid
Slovenia	No	-		No
	Not recognised		Whereas the	Except for
	in Slovenian law		concept of de facto	knowingly inducing
			directors is not	company to act in
			recognised, liability	a way that

52 Directors’ Duties and Liability in the EU

Country	Does the	If yes, how are	Under what	Application to
	concept of the	de facto or	conditions are de	parent
	de facto or	shadow	facto or shadow	companies /
	shadow	directors	directors liable?	controlling
	director exist?	defined?		shareholders?
			attaches for	damages
			knowingly inducing	company/its
			a company to act in	shareholders
			a way that
			damages company
			or its shareholders
Spain	Yes			Yes
	Part of statutory	Not defined in	de facto and	Liability as de
	law	statute, but	shadow directors	facto directors
		persons who	are generally	when managing
		continuously and	exposed to the	the companies
		independently act	same liability as de	affairs on a regular
		on behalf of the	jure directors	and continuous
		company with the		basis
		knowledge of the
		shareholders;
		actions must
		amount to “real
		administration”;
		unclear whether
		powers must be
		exercised in
		relation to third
		parties.
		Shadow directors
		are generally
		defined as
		persons who do
		not exercise the
		powers of de jure
		directors, but
		whose
		instructions are
		complied with by
		the directors
Sweden	Yes			Yes
	Recognised in	person not	Liability as for de	If parent carries
	case law and	formally	jure director	out tasks and
	legal literature	appointed, but		makes decisions
		carrying out tasks		as if it was a
		and making		(corporate)
		decisions as if he		director; liability
		or she was a		may also arise on
		director		basis of tort law
United	Yes	de facto		Yes
Kingdom		directors:	De facto directors	In exceptional
		A de facto director	are subject to the	circumstances as
		is a person who	same duties as de	shadow or de
		assumes the		facto director;

53 Directors’ Duties and Liability in the EU

Country	Does the	If yes, how are	Under what	Application to
	concept of the	de facto or	conditions are de	parent
	de facto or	shadow	facto or shadow	companies /
	shadow	directors	directors liable?	controlling
	director exist?	defined?		shareholders?
		status of, and	jure directors;	exercise of control
		performs the	Unclear whether all	rights (i.e. voting)
		functions of, a		will not suffice
			duties also apply
		director, is held
			with full force to
		out to be a
			shadow directors
		director, and
		undertakes
		functions in
		relation to the
		company which
		could only be
		properly
		discharged by a
		director.
		shadow
		directors:
		according to
		statutory definition
		a person ‘‘in
		accordance with
		whose directions
		or instructions the
		directors of a
		company are
		accustomed to
		act.”

Discussion

In all jurisdictions covered by this report, the main addressees of directors’ duties are, of course, the validly appointed members of the relevant company bodies. A person appointed in accordance with the applicable company law rules and the relevant provisions set out in the company’s articles of association is referred to as de jure director, and the application of the rules set out below to de jure directors form the core scope of this report.

As is evident from the table above, however, the vast majority of Member States recognise that the duties that national company law defines for de jure directors should, under certain circumstances, also apply to other persons with a comparable relationship to the company and its stakeholders. In the table above, we distinguish between two main sets of circumstances in which company law often extends the scope of application of some or all rules primarily applicable to de jure directors.

The first category concerns, in general terms, persons who act as if they were de jure directors, despite not having been validly appointed as such. This category can be further divided into two subgroups. First, the act of appointing a director may have been “defective”, e.g. because one or more formal requirements for a valid appointment have not been complied with. This is probably the group of cases with the longest history.66 It is also the group of cases in relation to which the suitability of an extension of the scope of application of directors’ duties is least controversial. Typically, neither the

66 In the UK, for instance, courts have been dealing with this problem since the 19th century; see D Kershaw, Company Law in Context (2nd ed., Oxford: Oxford University Press 2012) 320.

54 Directors’ Duties and Liability in the EU

“director” nor the appointing body will be aware of the defects of the appointment. Even the jurisdictions that do not formally recognise the application of directors’ duties to de facto directors according to the table above typically resolve the matter by providing that any defects that may have attached to the process of appointment “are healed” upon registration of a person as director with the relevant register.67

The second sub-group concerns persons in relation to whom no attempt has been made to formally appoint them as directors. Nevertheless, they behave as if they had been validly appointed – i.e. they perform the same function and fulfil the same tasks as de jure directors would usually do. As can be seen above, most Member States also extend at least some of the duties to this type of director. In some jurisdictions the application of directors’ duties may require that such persons act as if they were (de jure) directors not only internally, but also vis-à-vis third parties and/or require such persons to be held out as directors by the company. The exact content of the duties applicable to this type of director differs significantly across Europe, and in a number of jurisdictions no clear definition exists of the requirements that have to be met before someone is treated as a director.

The most problematic category concerns persons who do not act as if they were de jure directors, nor purport to be directors. Rather, they exercise a certain degree of influence over the company’s affairs that affords them a level of factual control comparable to the power that is typically vested in the board(s). As a matter of fact, in most groups of companies, the (group-wide) corporate strategy is not set at the level of each legal entity, but rather centrally at the parent company level. This then raises the question whether the parent company itself, or its directors, may be held liable in the same manner as the de jure directors of the legal entities they control.

None of the Member States answers this question with an unqualified “yes”, not least because doing so would call into question the very concept of limited liability. However, a number of Member States do provide for liability of legal or natural persons wielding significant influence over the company. These Member States differ significantly in the degree of control and influence that may lead to the imposition of director-like duties on the parent company or its management. The spectrum reaches from jurisdictions where a controlling shareholder or parent company will virtually never be held liable for exercising control over a company,68 to jurisdictions where – at least in the company’s insolvency – a significant risk of liability may exist for a parent company actively exercising control.69 In a number of jurisdictions, general tort law concepts are used to achieve similar results. Where this is the case, the liability will often also apply to foreign-incorporated companies.70

2.2.2 To whom are the duties owed?

Summary of the country reports

Table 2.2.2.a: Constituencies to whom directors’ duties are owed

Country	Duties owed to	Shareholders		Creditors		Other
	the company /					stakeholders
	source of
	directors’
	powers
Austria	- Company	1)	Company law:	1)	Company law:	-
	- Powers derived	no		no
	from statute, not	2)	General civil	2)	General civil

67See Art 3 of the codified version of the First Company Law Directive (Directive 2009/101/EC of the European Parliament and of the Council of 16 September 2009 on coordination of safeguards which, for the protection of the interests of members and third parties, are required by Member States of companies within the meaning of the second Paragraph of Article 48 of the Treaty, with a view to making such safeguards equivalent, OJ 2009 L 258/11).

68This seems to be the position of Bulgaria, for instance.

69See, e.g. the Czech law position, where the parent company may owe a duty of care in relation to the exercise of its control. Even where liability is provided for, the exact conditions differ significantly from jurisdiction to jurisdiction.

70See also Section 5. below concerning this problem.

55 Directors’ Duties and Liability in the EU

	delegated from	law: directors are	law: pre-
	the shareholders;	liable personally if	contractual duty to
	articles of	they acted	provide the
	association	intentionally and	creditors with
	cannot change the	pursued	relevant
	basic allocation of	significant	information
	powers between	economic self-	(requirements as
	shareholders,	interests or an	with liability to
	supervisory board	exceptional trust	shareholders (2))
	and management	relationship was	3) Insolvency law
	board; no	created with the
			protective rules
	instruction rights	plaintiff
			with respect to the
	of shareholders,	shareholder
			creditors
	but where
		3) Tort law:	a) delayed
	directors choose
		a) s. 1295(2)	application for the
	to put a question
		ABGB: general	opening of
	to the general
		liability for	insolvency
	meeting, they are
		intentionally	proceedings, s.
	bound to comply
		caused damages,	69(2) Insolvency
	with decision of
		provided that	Act:
	the shareholders
		defendant acted
			b) grossly
		unconscionably ;
			negligent
		b) s. 1300 ABGB:	encroachment on
		knowingly giving	creditors’
		wrong advice	interests, s. 159
		c) s. 874 ABGB:	Criminal Act
		deceit
		d) a violation of
		rules directed at
		protecting third
		parties can also
		lead to direct
		liability, e.g.
		violation of s.
		255(1) AktG
		(criminal liability of
		directors who
		intentionally make
		incorrect
		statements in
		public reports)
Belgium	- Company	Tort/Art. 528 CC	1) Tort/Art. 528	Tort/Art. 528 CC
	- Groups: the	Note: The	CC
	group interest can	relevance of this	2) Art. 530 CC
	be taken into	claim is limited to	(bankruptcy)
	account under the	scenarios where
	conditions of	the company has
	Rozenblum71	suffered a loss
	- Liability based	distinct from the
		loss suffered by
	on Art. 527 CC
		all shareholders
	(general law of
		proportionally as a
	contract)
		result of the
		decrease of the

71 See above n 64.

56 Directors’ Duties and Liability in the EU

			company’s assets.
			Example of
			liability: the
			shareholder
			bought his/her
			shares at a price
			that was too high,
			having based
			his/her decision
			on incorrect
			accounts
Bulgaria		Company	No		No	No
Croatia		Company	No special duties		Duties not owed	No duties to other
			to the		to the creditors,	stakeholders
			shareholders; but		except indirectly,
			indirectly, by		by acting in the
			acting in the best		best interest of the
			interest of the		company, which
			company, the		includes the
			directors may		requirement that
			have duties to the		the company has
			shareholders. If		sufficient assets to
			they suffer		honour the
			damage		obligations
			independently		towards the
			from the damage		creditors.
			caused to the
			PLC,
			shareholders have
			a claim against
			the directors (or
			other person who
			deliberately
			influenced
			members of board
			or executive
			officers to perform
			an action which
			caused damage).
Cyprus		Company	In particular		In the vicinity of	No
			situations		insolvency
			according to		(according to
			English case law		English case law)
			(see below)
Czech Republic		- Company	- No		No	No
		- The executive	- Shareholders
		and supervisory	may have a direct
		organs are	claim under tort
		subordinated to	law (see s. 415
		the GM, which	Civil Code:
		can give	everyone is
		instructions to the	obliged to act so
		other organs	as not to cause
		(derived from s.	damage to health,
		194)	property, nature
			and the
			57	Directors’ Duties and Liability in the EU

			environment), but
			the claim is
			generally directed
			against the
			company, not the
			individual director
Denmark		- Company	Members of the		Yes, see left	Yes, see left
		- Powers	management who,
			in the
		delegated from
			performance of
		the shareholders,
			their duties,
		who have
			intentionally or
		instruction rights
			negligently cause
			damage to
			shareholders or
			third parties are
			liable to pay
			damages, s.
			361(1)
Estonia		- Company	In general no duty		In general no duty	-
		- Powers derived	owed to the		owed to the
			shareholders, but		creditors, unless
		from statute, not
			directors can be		the director
		delegated from
			held liable to the		breaches a duty
		the shareholders
			shareholders (and		established for the
			creditors) where		protection of the
			the damage was		creditors (duty to
			caused wrongfully		organize
			as the result of a		accounting, file for
			merger,		bankruptcy,
			Commercial		mergers etc.); this
			Code, § 403(6)		liability is based
					on tort law
Finland		- Company	Liability can exist		Liability can exist	Liability can exist
		- The directors	towards the		towards third	towards third
			shareholders for		parties for	parties for
		have general
			breaches of		breaches of	breaches of
		powers to manage
			provisions of the		provisions of the	provisions of the
		the company; in
			Companies Act,		Companies Act,	Companies Act,
		contrast, the GM
			Ch. 22, s. 1(2)		Ch. 22, s. 1(2)	Ch. 22, s. 1(2)
		shall only decide
		over specifically
		defined matters
France		- Company	Yes; duty of		-	Directors owe
		- Groups: the	loyalty: e.g., if the			duties directly to
			director transacts			third parties, and
		group interest can
			directly with the			are liable to these
		be taken into
			shareholder and			parties, if they
		account under the
			buys the shares			commit a fault that
		conditions of
			without disclosing			is separable from
		Rozenblum
			that a potential			their functions
		- Source of
			buyer exists who			(faute séparable
		directors’ powers:
			is prepared to			des fonctions)
		with a decision
			purchase them for			(stems from
		from 1943, French
			a higher price			administrative
		company law
						law).
		shifted from a
						Definition
		contractual to an
			58	Directors’ Duties and Liability in the EU

	institutional			separable fault: if
	approach, i.e.			the director
	directors receive			1) intentionally
	their powers from
				2) commits a
	statute
				particularly
				serious fault that
				is incompatible
				with the normal
				exercise of the
				director’s
				functions (e.g., the
				director failed to
				insure the
				employee’s
				executive car)
Germany	- Company	1) Company law:	1) Company law:	-
	- Powers derived	no	no
	from statute, not	2) Possibly	2) Possibly
	delegated from	general civil law or	general civil law or
	the shareholders	tort law, but	tort law, but
		requirements are	requirements are
		restrictive	restrictive
Greece	Company	-	Shift in the vicinity	-
			of insolvency to
			the creditors
Hungary	- Company	In limited cases	Shift in the vicinity	-
	- Powers derived	duties under	of insolvency to
		general private	the creditors
	from statute, not
		law may be owed
	delegated from
		directly to the
	the shareholders
		shareholders, e.g.
		if the directors,
		upon the request
		of the
		shareholders,
		provide
		information about
		the affairs of the
		company or make
		direct approaches
		to, and deal with,
		the shareholders
		and hold
		themselves out as
		agents for them in
		connection with
		the acquisition or
		disposal of shares
Ireland	- Company	Duties may be	Limited duty of	No common law
	- Powers	owed to a	directors to	duty to consider
		shareholder	consider the	the interests of
	delegated from
		directly where	interests of	employees, but s.
	the shareholders
		what is at issue is	creditors when	52 of the
		not the collective	their interests	Companies Act
		interests of the	intrude on the	1990 requires
		corporate entity	company being	directors to

59 Directors’ Duties and Liability in the EU

				but the interests of	wound up, on	consider the
				the shareholder	occasion where a	interests of the
				qua individual	company is	company’s
					insolvent and	employees as well
					even where	as the interests of
					insolvency is	members (not
					simply looming on	significant in
					the horizon	practice given the
						lack of a direct
						enforcement
						mechanism)
Italy		Company		Only if the	Art. 2394 Civil	-
				director’s action	Code: liability
				exclusively	directly to
				affected the rights	creditors if the
				of the	company’s assets
				shareholder, Art.	have not been
				2395 Civil Code	preserved
					(particularly
					relevant when the
					company is
					insolvent)
					(majority of case
					law: tort-based
					liability, with the
					consequence that
					the claimant has
					to prove
					negligence)
Latvia		- Company		Only according to	Only according to	Only according to
		- Powers derived		principles of tort	principles of tort	principles of tort
				law	law	law
		from statute, not
		delegated from
		the shareholders
Lithuania		Civil Code, Art.		Art. 19(8) Law on	The Supreme	-
		2.87(1):		Companies: ‘The	Court has stated
		- Company		management	that civil liability of
				bodies of the	the directors can
		- Members of
				company must act	arise both to the
		other bodies of
				on behalf of and in	company, when
		the company
				the interest of the	directors act
				company and its	against the
				shareholders.’	interests of the
					company, and to
					third parties when
					they violate
					statutory
					restrictions that
					are aimed at
					protecting such
					third parties (3K-
					7-266/2006).72
Luxembourg		- Company		General tort law or	General tort law or	General tort law or

72 It should be noted that this case involved bankruptcy fraud and directors had already been proven guilty in criminal proceedings. Therefore, liability to third parties is presumably restricted to exceptional cases (bankruptcy fraud). In such cases, creditors can claim damages directly from directors.

60 Directors’ Duties and Liability in the EU