Managing legal liabilities with insurance
The company director has a corporate mandate within the company.
This makes him a decision-maker subject to the obligations arising from the corporate mandate. But this exercise can be a path strewn with pitfalls.
The Agent may be held liable at any time for civil, tax or criminal offences. This action may be brought by a member of the company, who may be a partner or a third party to the company, such as a customer, supplier or administration…
Not to mention the judicialization of society and the repressive tendency of the courts in this area.
Thus, for example, in civil law, a simple act of management can be the trigger point for an action against the director.
This is the case for :
– too great a financial commitment for the company in relation to its results;
– failure to comply with the legal formalities governing the decision-making process;
– a guarantee by the company for a personal debt of the director ;
– an agreement with a third party exceeding the scope of the executive’s powers …
Criminal and fiscal liability: two swords of Damocles
Legal rigor is therefore required in the exercise of executive functions, especially with regard to criminal liability, as :
– a poorly managed workplace accident;
– a misdirected expense ;
As for tax and social security liability, the company director can be declared jointly and severally liable for payment of the company’s tax and/or social security debts, not to mention the action for payment of liabilities…
To minimize the risk of confrontation with the administrative and legal apparatus, business leaders must subject every action and every decision to two imperatives: legal certainty and compliance.
So, company directors & managers :
- If you decide to set up a company with a third party, it’s a good idea to draw up a partnership agreement as soon as the company is set up, to set out the various agreements you and your partner have reached.
- If you have delegated authority, you should consider taking out professional insurance.
- If an agreement is reached with a third party to the company, consider having it formalized in a memorandum of understanding.
- If you intend to make a significant expenditure on behalf of the company, be sure to check the articles of association before approving it.
- If a change occurs in the life of the company, think about the formalities that must be carried out to ratify it (registry procedures, amendments to the articles of association, general meeting, publication, etc.).
- If you’re asked a question by the authorities, make sure your answer is legally compliant.
And don’t forget
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In an economic world of ever-increasing legal complexity, Brizon & Mousaei is at your side to help you navigate the intricacies of corporate law. Contact us so that we can advise and support you in securing the legal basis for your decisions and the untroubled growth of your company.
