Director Liability Claims involve the personal financial liability of a company's executive. Although the main principle of an LLC or JSC is limited liability, the law does not protect a director who acts dishonestly or violates the law. Liability arises when a director's action (or inaction) causes the company's bankruptcy, insolvency, or significant financial loss. Also, a director can be held liable to the state for unpaid taxes if it is proven that they had the funds but used them for other purposes. This is a complex legal process requiring "piercing the corporate veil." Legal.ge offers lawyers who will help creditors or partners demand debt repayment directly from the director's personal assets.
What Does Director Liability Service Cover?
The service aims to compensate damages caused by the director. It includes:
- Insolvency Proceedings: Lawsuits against a director who failed to file for insolvency on time, thereby worsening the creditors' position.
- Imposing Personal Liability: Creditors demanding that the director pay the company's debts from their own pocket (if the company is empty).
- Tax Liability: Disputes with the state or director regarding transferring tax debts to personal liability.
- Derivative Suits: A partner filing a lawsuit against the director demanding compensation for damages caused to the company.
- Asset Concealment Detection: Identifying facts of illegal alienation of assets by the director and recovering them.
Real-World Scenarios Where You Need a Lawyer
For example, you are owed 50,000 GEL by a company. The company accounts are empty, but you know the director transferred the company car and office to their spouse a month before bankruptcy. A lawyer will help you prove this was fraud against creditors and demand the director's personal liability. In another case, a director failed to pay VAT, resulting in a huge fine for the company. Partners can sue the director and demand reimbursement of this fine.
Georgian Legal Framework
Director liability is regulated by the "Law on Entrepreneurs" and the "Civil Code." Crucial are Article 9 (Powers of Management and Representation) and insolvency legislation. The law states that if a company is insolvent, the director must act in the interests of creditors. Violation of this duty leads to personal liability. Also, the Tax Code provides mechanisms for transferring taxes to the director under certain conditions.
The Process Step-by-Step
1. Financial Analysis: Studying the company's financial state and director's actions. 2. Evidence: Revealing asset movements and suspicious transactions. 3. Lawsuit: Filing a claim in court for damages. 4. Freezing Order: Freezing the director's personal property. 5. Enforcement: Recovering funds from the director's personal assets.
Why Choose a Specialist on Legal.ge?
Imposing personal liability on a director is difficult because courts protect the "limited liability" principle. Success requires strong argumentation and evidence. On Legal.ge, you will find lawyers who know how to pierce the corporate veil and achieve justice.
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