Director Liability in Spanish Companies: Arts. 236-241 LSC : Lexiel

Director Liability in Spanish Companies: Legal Framework and Liability Claims

The civil liability of directors of capital companies (sociedades de capital) is governed by Articles 236 to 241 of the Companies Act (Ley de Sociedades de Capital, Royal Legislative Decree 1/2010, of 2 July, hereinafter "LSC"). It is one of the most litigated areas of Spanish commercial law.

Requirements for Liability (Art. 236 LSC)

Article 236 LSC establishes the general liability regime of directors towards the company, shareholders, and third parties for damages caused by acts or omissions contrary to law or the articles of association, or by acts performed in breach of the duties inherent to the office.

The three requirements that must concur are:

Act or omission by the director contrary to law, the articles of association, or the duties of the office
Actual and quantifiable damage (real and not merely hypothetical: Supreme Court (Tribunal Supremo, TS) judgment of 16 December 2016)
Causal link between the conduct and the damage

Subjective Scope (Art. 236.3 LSC)

Liability also extends to de facto directors (those who exercise the functions of the office in practice without formal appointment: TS judgment of 8 February 2008), shadow directors (those who give instructions to formally appointed directors), and senior executives in certain circumstances.

Business Judgment Rule (Art. 226 LSC)

Law 31/2014 introduced the business judgment rule into Spanish law (Art. 226 LSC): a director who acts in good faith, without personal interest in the matter, with sufficient information, and following an appropriate decisión-making procedure is shielded from liability even if the decisión proves harmful.

This rule is narrowly applied: it does not provide protection against breaches of law, the articles of association, or duties of loyalty, nor where there is an undisclosed conflict of interest.

Derivative Liability Action (Art. 238 LSC)

The derivative action (acción social de responsabilidad) seeks to compensate damage suffered by the company itself. It may be brought by:

The company: subject to prior authorisation by the general shareholders' meeting (ordinary majority), which may also resolve to remove the director from office
The minority (Art. 239 LSC): shareholders representing at least 5% of the share capital (1% in listed companies) if the meeting did not resolve to bring the action, or failed to do so within one month of the request, or where the company is unable to act because it is in liquidation
Creditors (Art. 240 LSC): subsidiarily, if the company's action has not been brought and the company's assets are insufficient to satisfy their claims, recognised as a direct action by the TS judgment of 28 January 2020

Limitation period: 4 years from the date on which the action could have been brought (Art. 241 bis LSC, introduced by Law 31/2014). The TS judgment of 28 February 2018 clarified that the limitation period begins (dies a quo) when the damage is known or could have been known.

Individual Liability Action (Art. 241 LSC)

The individual action (acción individual de responsabilidad) protects shareholders or third parties who suffer direct damage to their own assets (as opposed to the indirect or reflective damage caused to the company). Key features:

Standing: any shareholder or third party (creditor, employee, supplier) suffering direct patrimonial damage

The damage must be direct to the claimant, not a mere reflection of damage suffered by the company (TS judgment of 26 May 2015)
Causal link with the director's conduct (not the company's)
Limitation period: 4 years (Art. 241 bis LSC)

Common scenarios in case law:

Payment of company debts without funds: a director who signs promissory notes or cheques without cover knowing the company's insolvency situation (TS judgment of 3 October 2016)
De facto closure without liquidation: breach of Art. 367 LSC (company debts arising after the grounds for dissolution = joint and several liability)
False information to third parties: inducing a third party to contract with the company

Liability for Company Debts (Art. 367 LSC)

Article 367 LSC establishes a special joint and several liability: directors who, when a statutory ground for dissolution exists (qualifying losses, minimum share capital not met, deadlock in corporate bodies), fail to convene a general meeting to resolve dissolution or file for insolvency, are jointly and severally liable for company debts arising after the ground for dissolution materialised.

The TS judgments of 18 April 2019 and 30 June 2021 have consolidated the following principles:

A presumption that the ground for dissolution arose as of the closing date of the financial year in which the qualifying losses are established
The director bears the burden of proving due diligence (reversal of the burden of proof)
Liability covers only debts arising after the triggering event, not all company debts

Director's Defence: Procedural Strategy

In response to a claim, the main lines of defence are:

Absence of one or more of the required elements (no act contrary to law, no damage, or no causal link)
Business judgment rule (Art. 226 LSC): demonstrating good faith, sufficient information, and an appropriate decisión-making procedure
Limitation (4 years; Art. 241 bis LSC): identifying the dies a quo
Vote against or abstention in the harmful resolution (exonerating if recorded in the minutes: Art. 237.1 LSC)
Justified lack of knowledge for non-executive board members without management functions

Conclusion

Director liability in Spanish companies is an expanding field, driven by increased corporate litigation and the extension of liability to de facto directors. The key to an effective defence lies in documenting the decisión-making process, placing dissenting votes on record, and acting promptly upon any signs of insolvency.

Lexiel enables you to search Supreme Court case law on director liability, filter by LSC article, and draft claims or defence submissions with verified citations.