The CEO is not just the head of the company. This is the executive body of the LLC, which is responsible for the activities of the company to participants and contractors. In case of non-compliance with their duties, various legal, including subsidiary, liability of the head arises, which is provided for by administrative, tax and criminal laws. In some cases, he may get away with a fine, and in others, even imprisonment. The article touches on different types of punishment and examines in detail the subsidiary liability of the Director of Debt LLC.
Management team
The leaders of the organization include:
- Director
- substituents;
- Chief Engineer;
- Chief Accountant.
Each of these persons is responsible by law within the limits of his competence. Except as under current law, liability also occurs in accordance with the organization’s charter. Penalties may be oral. But officials can be fired, as well as obligated to compensate for the damage suffered. In addition, subsidiary liability for his obligations may occur directly for the director. Let us dwell on this moment in more detail.
Director
The head makes decisions regarding the activities of the company. To prevent abuse, labor law provides for the liability of this official for damage resulting from improper actions. The norm applies to both direct losses and inaction, as a result of which profit was lost.
This is about:
- material damage due to compensation for the value of property that was lost;
- compensation of expenses for restoration of rights due to unlawful actions of the head;
- lost income, when there was every opportunity to get it.
What do lenders expect?
Each creditor who files for bankruptcy of the debtor wants to return their invested funds. However, after the sale of property most often there is no money left for it. After all, there are practically no assets that would be able to settle accounts with creditors. Otherwise, the company could take a loan secured by property to pay off debt or find another way to stay afloat.
Therefore, for creditors, the issue of the director's subsidiary liability in bankruptcy is urgent. By the way, it happens not only in connection with this procedure. But the article deals with precisely this situation.
Subsidiary liability of the director of LLC
Lenders can satisfy claims only through the sale of company property or registered capital. It is known that in the LLC neither the director nor the participants are responsible for the debts. This rule is expressly provided for by the Civil Code, namely paragraph 2 of Article 56.
At the same time, having penetrated the letter of the law, it becomes clear that exceptions to this rule by individual laws can be established. Thus, the bankruptcy regulation allows the director to be subsidized and the owners of the company. This becomes possible when they deliberately made the company insolvent and did not fulfill their obligations under the bankruptcy procedure, preventing settlement with creditors.
Person controlling the debtor
Thus, for debts arising as a result of ordinary risk in conducting business activities, the subsidiary director of the LLC debt cannot incur subsidiary liability. But if it is possible to prove that intentional actions took place, then, based on the bankruptcy law, this becomes possible.
In 2009, amendments were made to the law, as a result of which business owners and company executives can be held liable for the failure to fulfill obligations to creditors. Then they introduced a new term: “the person controlling the debtor”.
Who are you attracted to?
Persons who may be responsible for this type of activity are as follows:
- supervisor;
- founder (or founders);
- management body;
- liquidation commission (or liquidator);
- property owner.
All of them are persons controlling the debtor. Even if they are no longer related to the company, they can be attracted within two years after the removal of their authority, if the court accepts the application for declaring the debtor bankrupt.
Grounds for the Director's subsidiary liability
Often, business leaders and owners are confident that it is impossible to recover funds from the company's debts. Very often create such legal forms of the company as limited liability companies. Based on the name, it becomes clear that liability is limited (we are talking about property).
At the same time, the general law (Civil Code) provides for the need to exercise guidance in good faith and reasonably. And special laws provide for liability for the company's foreseeable loss.
In order for the director to become subsidiary, the following conditions must be proved:
- losses at which the company's property will not be enough to pay off debts;
- the director’s actions are unlawful (if he exercised his functions strictly within the framework of the law and the consequences did not come about because of him, then prosecution is impossible);
- amount of losses - creditors must establish exactly how much loss the company suffers, if this is done during the bankruptcy procedure, it becomes possible after the sale of property;
- the relationship between cause and effect, that is, the director’s actions and the losses that have occurred (for example, the obvious fact of such a connection is the sale of property at too low a price).
In addition, liability may also arise if, during the period when creditor claims are considered, it turns out that there are no necessary documents for accounting, a report, or if they are unreliable. And this applies to the head at the time of the bankruptcy procedure, and his predecessors, if they are guilty of the fact that the state of the company has been brought to such a limit.
Who is applying?
The subsidiary liability of the director of LLC debt for bankruptcy arises as a result of filing an application as part of the bankruptcy procedure of the company. The persons who can submit it are the competition and external managers or an authorized body. Thus, they submit this requirement in the performance of their activities, since after the completion of the procedure, such a procedure becomes impossible.
So in general terms, subsidiary liability for debts accumulated by a bankrupt debtor is realized. This topic has many nuances that require special attention. Now consider the penalties that are imposed on directors-offenders.
Executive Administrative Responsibility
In the Code of Administrative Offenses, the subjects of liability can be legal entities and individuals - officials. Thus, both the organization and the director can be punished, and, which is characteristic, at the same time.
So, the smallest possible penalty is imposed on the head of up to five thousand rubles in cases where consumer rights are violated, with minor tax misconduct and lending in violation of the law.
A more severe punishment, namely a fine of up to thirty thousand rubles and a three-year disqualification, awaits him when the law regarding advertising, fictitious bankruptcy is violated (due to which, among other things, the subsidiary liability of the general director of the LLC comes), there is a failure to provide information to the authorized body, unfair competition is initiated, the poor quality of the services and goods provided is recorded, as well as due to the failure to provide information on accounts held in rubles th.
CEOs may be required to pay an even larger fine. The reason for this is a violation of fire safety standards, legislation regarding migrants (namely, illegal attraction of labor), as well as illegal currency transactions.
Head's criminal liability
In addition to administrative responsibility for unlawful actions, the head can be punished under criminal law. In many respects, the offenses are similar to administrative ones, but they are more serious in terms of consequences. Thus, intentional bankruptcy falls under one and another legislation. The punishment in this case depends on the size of the funds: up to one and a half million rubles and above, respectively.
So, personal responsibility occurs as a result of:
- non-payment of wages;
- illegal dismissal;
- bribery;
- violation of the rights of the author;
- abuse of authority.
Economic crimes include the following:
- illegal business activities;
- money laundering ;
- debt evasion;
- illegal obtaining a loan;
- disclosure of commercial secrets;
- violation of tax laws;
- fictitious bankruptcy.
How to make everything happen, and there was nothing for it
The offenses listed above, including those for which the Director of Debt of the LLC incurs subsidiary liability, are far from all possible for which the official may be punished. The head must strictly comply with labor laws, environmental requirements when carrying out activities and other requirements of the law when working.
The newly elected director should protect himself from the consequences of the actions taken by his predecessor. To do this, it is advisable to take the following steps:
- appoint a commission to transfer cases;
- receive an act of acceptance;
- reissue documents taking into account persons having the right to sign;
- Get information about all bank accounts and sample signatures;
- check all contracts;
- apply for data changes in the Unified Register;
- notify counterparties of the appointment of a new CEO.
When taking office, it is necessary to soberly assess your capabilities and apply all the data in order to really analyze the situation at the company. Indeed, as it turns out, even in spite of the legal form in the form of a limited liability company, the subsidiary liability of the general director can still occur.