Director's liability: when are you personally liable?

A common misconception is that a BV always protects directors from liability. In practice, a director can be held personally liable under certain circumstances.

When can a director be liable?

Director's liability can arise in cases such as:

• ✓ improper management
• ✓ selective payments to certain creditors
• ✓ entering into obligations while it is clear that these cannot be fulfilled
• ✓ failure to comply with administrative and publication obligations

The threshold for liability is high, but in cases of seriously culpable conduct, personal liability can be established.

Private assets at risk

When there is director's liability, the director's private assets can be targeted. This risk particularly applies in bankruptcies, but also outside of them.

Practical example

A director continues to accept orders while knowing that the company is no longer financially able to execute them. Suppliers and customers remain unpaid and hold the director personally liable.

Timely action prevents problems

By seeking legal advice in time and acting carefully, director's liability can often be prevented.