Claim of responsibility against managing director of private limited company
By Stefano Trifirò and Federico Manfredi
Following the reform of corporate law of 2003 a large number of company even with a complex structure choose to be incorporated as private limited rather than a public limited company.
Many do not know that even if private limited are similar to public limited company the civil code contains some differences which are particularly relevant in case of conflict such as the case of claim of responsibility against the ex-managing director.
The rules for limited companies are specific and simpler as under article 2392 and following of the civil code.
Where shareholders revoke the managing director for non performance towards the company an action for damage may be brought against him under article 2476 of the civil code.
What are the conditions and the limits of the rules in such case?
As regards the conditions of responsibility this arises from one of the following hypotheses: violation in bad faith of the laws; proper and diligent management of assets of others and lastly violations of articles of incorporations, resolutions of general meeting or mismanagement.
Responsibility may be invoked also in the case of omissions in the form of failure of supervision of management or failure of checking wrongful act against the company possibly known by the administrators.
The rules set out that responsibility does not extend to those not guilty or to those who knew about wrongful intent and who expressed their dissent putting the responsibility for bad management on those who act.
Article 2476 civil cod comma 3, concerning claim of responsibility brought by each partner stipulate that in case of serious irregularities in management of the company one can ask as interim relief the revocation of managing directors. Serious irregularities mean damaging act of administration against the assets of the company also potentially but in any case causing significant damage to the company.
The action of the single partner admits under the law to the company the right to compensation stating that to be responsible one must have damaged the assets of the company.
Indeed, the action of responsibility brought by the partner against the managing director of private limited is a contract and the partner must claim not only the non-
performance of the managing director, but also claim and prove the existence of concrete damage that is a diminution of the assets.
In other words mismanaging conduct of the managing director is not enough for a compensation for damages at the expense of the company (Tribunal of Rome 24/08/2016).
That sense one can state that mismanagement of the managing director of a private limited is estimated as less restrictive than for public limited which is the difference between the two sets of rules.
The party that calls on the judge to find compensation for damages as under article 2476 of the civil code, will have the burden to prove specific claim against the managing director proving conduct against the law that is against the social status of the company or in mismanagement the rules of good management that may have been violated, with what practical conduct clearly defined and principally the causal link between mismanaging and damage incurred.
Instead the defendant managing director has a burden to demonstrate to prove that his conduct held for the company may be attributed to him or omission exercised against his explicit dissent.