In the performance of his duties, the manager of an LLC can be held responsible. This liability can be civil, tax or even criminal in the most serious cases.
As part of its activities, the manager of an LLC can be held responsible. This challenge can be civil, tax or even criminal in the most serious cases.
Civil liability of the SARL manager
The Commercial Code stipulates that the SARL manager is personally liable in the following cases:
- if he does not comply with the clauses provided for in the statutes of the LLC, for example if the latter changes the registered office unless this change has not been authorized by the partners;
- if he is responsible for a mismanagement, such as disproportionate expenses in relation to the means of the company, the establishment of a balance sheet inaccurate, the establishment of a contract detrimental to the company or the regular absence from shareholders' meetings;
- if he does not comply with the regulations in force applicable to the SARL. The company must suffer damages for the civil liability of the manager to be engaged.
Moreover, the Civil Code indicates that the manager is civilly liable, just like any other person, for damage caused to a third party.
To engage the civil liability of the manager, three cumulative conditions are necessary:
- a fault must be committed (one of the 3 cases provided for by the commercial code which were mentioned above),
- harm must exist,
- and there must be a causal link between the fault committed and the harm caused.
To initiate legal action and challenge the civil liability of the manager, it is necessary to determine the person who suffered the damage:
- if the damage is caused to the company, a social action against the manager is possible. For this, the partners must own at least 10% of the capital of the company to take legal action;
- if the damage is suffered personally by a partner, the latter may bring an individual action against the manager to be compensated;
- if the damage is caused to a third party, the fault committed by the manager must be distinct from his duties and be personally attributable to him.
If several managers are found liable, the court determines the contribution of each to the compensation of the victims.
When the SARL is in receivership or judicial liquidation, the manager who has committed a fault may be ordered to meet the company's liabilities. It is one of sanctions incurred by the directors of a liquidated company.
Fiscal responsibility of the manager of the SARL
In tax matters, the responsibility of the manager of an LLC can be engaged:
- in the event that fraudulent maneuvers are committed
- or if repeated omissions of the tax duties of the company are detected, which makes it difficult to recover the taxes and penalties to which the LLC is subject.
The manager can therefore be made jointly and severally liable for the payment of taxes and penalties for the company.
Penal sanctions incurred by the manager of SARL
The Commercial Code provides for numerous penalties against the manager of SARL. Here we will look at the most common offenses.
Misuse of corporate assets
Penalty incurred: 5 years' imprisonment and a fine of 375 euros, for managers who, in bad faith, use the property or the credit of the company, for personal purposes or to favor another company in which they are directly or indirectly involved. indirectly.
The manager must take care to distinguish the assets of the SARL from those belonging to his private assets, or to another company. For example, the manager using company property for personal purposes or paying for personal expenses through the SARL commits an abuse of company property.
It is not necessary for the company to suffer damage for this offense to be established, but it is essential to prove the manager's bad faith.
The distribution of fictitious dividends
Penalty incurred: 5 years' imprisonment and a fine of 375 euros, for managers who, without an inventory or with the help of fraudulent inventories, distribute fictitious dividends between the partners.
The legislator wishes to punish the manager who, without an inventory or by having recourse to a fraudulent inventory, distributes dividends to the partners when these sums are not distributable.
The presentation of annual accounts does not give an accurate picture
Penalty incurred: 5 years' imprisonment and a fine of 375 euros, for managers who, even if there is no distribution of dividends, provide partners with annual accounts not giving, for each financial year, an exact representation of the result of operations for the financial year, of the financial situation and of the assets at the end of this period, in order to conceal the true situation of the company.
Whether for the partners or for any interested party, the information provided by the annual accounts is extremely important. The legislator therefore wishes, with this measure, to sanction the manager who hides the true situation of the company.
Abuse of power or voice
Penalty: 5 years' imprisonment and a fine of 375 euros, for managers who, in bad faith, use their powers or their votes, contrary to the interests of the company, for personal purposes or to favor another company in which they are directly or indirectly involved.
This offense is often linked to the misuse of corporate assets. When the leader abuses his authority within the company, in particular through his majority stake in the capital, it is often to grant himself an unjustified privilege.
Other offenses
There are many other criminal offenses for SARL managers, including:
- the overvaluation of contributions in kind,
- bankruptcy,
- issue of securities,
- failure to convene the annual general meeting,
- failure to communicate mandatory information,
- offenses relating to the constitution of an LLC,
- obstacles to verifications and controls by the statutory auditors,
- the lack of mandatory information on certain documents…
You will also find on the theme of the manager of SARL:
