The Chief Executive’s Liability

Understanding and curbing it

The chief executive’s duty consists in managing, administering and operating one or several companies.  When this duty is being fulfilled, the company’s liability can be incurred, but also, in certain cases, the chief executive’s personal liability may be engaged by the company’s shareholders or by third parties, on a civil, contractual or tortious basis.

In its work of drafting legal instruments and providing advice, Thémis assists the chief executive in maintaining the company’s compliance with the various annual legal and fiscal obligations, but also with isolated obligations.

From the simple delegation of powers to corporate office, including the accumulation of these powers with an employment contract, or the supply of services, it is crucial that serene, efficient management be provided, combined with a thorough knowledge of the regulations which apply and that the right management decisions be made.

An attorney’s careful drafting of agreements between shareholders (articles of association, extra-statutory agreements and contracts signed by the chief executive (employment contract, the supply of services…) also contribute to the firm’s anticipation of the difficulties linked to the chief executive’s liability.

The firm accompanies the chief executive in making investment or financial reorganization decisions.

Indeed, a violation of the articles of association, or of the extra-statutory agreements (shareholders agreement) and noncompliance with the regulations which apply to the company, as well as, more generally, management faults, engage the chief executive’s liability vis-a-vis its shareholders.

Thémis also provides all relevant advice to the chief executive in his daily management of the company, for example in the framework of legal services contracts and accompanies the chief executive in making investment or financial reorganization decisions.

In dealings with third parties, the chief executive must commit a fault which is “distinct from his functions » if his liability is to be incurred, namely a particularly serious fault which is incompatible with the 1performance of his functions. This is the case, for example, when the chief executive commits an intentional criminal violation..
In such a case, his liability can be incurred, hence the necessity of being able to rely on the supervision of an  advisor who is familiar with the company’s activity.

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