When the liquidation of a company is implemented, the conduct du leader can be assessed to determine if he participated in the insurmountable problems encountered. If the judges relate sa Responsibility Law, it is liable to serious are civil and/or criminal. However, it should be emphasized that small mistakes do not have large consequences. Foundation-company-ricard informs you about the sanctions incurred by the manager of a liquidated company.
Penalty number one: prohibition to manage
This punishment generally applies to the leader who has done some small blunders. The Commercial Code (Article L653-8) defines different situations where it applies. It is imposed on a leader who:
- Has not requested the opening of collective proceedings within 45 days of the cessation of payments (and has not requested the opening of a conciliation procedure either);
- Acts in bad faith against the legal representative, the administrator or the liquidator (did not deliver the documents on time);
- Failed to notify respondent of commencement of legal proceedings within ten days;
- Has committed acts that may result in personal bankruptcy (see below).
This sanction prevents the accused leader of direct, administer, manage or control a Company for a certain period. Once applied, it is entered in the Trade and Companies Register.
Sanction #2: Personal Bankruptcy
La personal bankruptcy is a harsher penalty which can be imposed on the manager. It is similar to the prohibition to manage, but the latter cannot be modified if it is pronounced. In addition, it may be accompanied by other sanctions, for example, the inability to hold office as an elected official.
Personal bankruptcy can apply to leader having :
- Mixed the company's assets with his own assets,
- Used company resources or credit for one's own benefit,
- Acted personally for commercial purposes,
- Improperly pursued a loss-making operation,
- Misappropriated or concealed assets or fraudulently increased the liabilities of the company,
- Carried out an activity despite a ban,
- Bought goods to sell them at a price lower than the market price in order to delay the opening of a procedure,
- Employed ruinous means to procure funds to delay the initiation of proceedings,
- Undertakes excessive commitments to the detriment of the company or its situation,
- Deleted from accounting documents,
- Not having kept accounts or keeping fictitious, incomplete or irregular accounts,
- Obstructs the proper conduct of a procedure,
- Paid one creditor at the expense of others despite a known state of insolvency.
Personal bankruptcy can last up to 15 years. This sanction can however be lifted before its term under certain conditions.
Sanction 3: Liability for lack of assets
This sanction targets the leader who has committed management errors resulting in a lack of company assets (article L651-2 of the French Commercial Code). This is a contribution request. That's why we talk aboutpassive remedial action : the manager must then assume all or part of the social debts. The money goes into the company's assets and is used to repay creditors.
In order for the remedial action of the passive to be pronounced, it is however necessary demonstrate causation between lack of assets and management errors. As such, the article of the Commercial Code specifies:
However, in the event of simple negligence of the legal or de facto manager in the management of the company, his liability with regard to the lack of assets cannot be engaged.
However, it can be a major fault or an accumulation of several management faults. Here, legal action can only be claimed by:
- the liquidator,
- Crown,
- Or the majority of creditors appointed controllers (in the event of inaction by the liquidator).
Penalty 4: Bankruptcy
La bankruptcy is a penalty sanction who punishes the serious cases personal bankruptcy. It entails for the leader a 5 year prison sentence and fine of 75 euros (according to article L654-2 of the Commercial Code).
This offense concerns managers who, in the event of the opening of reorganization or judicial liquidation proceedings:
- Buy to resell below price or use ruinous means to obtain funds, in order to avoid or delay the initiation of proceedings;
- Misappropriate or conceal company assets or fraudulently increase liabilities;
- Make accounting documents disappear, keep fictitious, incomplete, irregular or no accounting.
To go further on the subject of business closures:
- How to deregister a company ?
- What is the cost of closing a company ?
- How to close a SASU online ?
- What is simplified judicial liquidation ?
- How to close your company yourself ?
What is the main sanction incurred by a director of a liquidated company?
The main sanction incurred by an officer of a liquidated company is personal liability, ie the person can be held responsible for all the debts and obligations of the company.
What is the penalty for mismanagement?
In the event of mismanagement, the director of the company may be held responsible for the losses suffered by the company, and may be ordered to pay damages.
What is the penalty for misuse of company funds?
In the event of misuse of company funds, the director may be held responsible for the use of the funds and may be ordered to return the funds to the company or to a third party.
