My resignation as director has not been published yet in the Belgian Official Gazette: can I still be held liable?
The acquisition of a company often implies that the transferor must resign from his office as (managing) director of the company/companies he is transferring.
This resignation must be published in the Annexes of the Belgian Official Gazette, but this fact is sometimes overlooked by the company (under control of the buyer), which may lead to an important time gap between the resignation and its official publication. The bill on the new Companies and Associations Code provides an answer by allowing the former directors themselves to publish their resignation in the Annexes of the Belgian Official Gazette. Even if the company (or in the future the director) would proceed immediately to the publication, it will still take a few weeks before the resignation will effectively be published.
So, transferors wish to know whether they can still be held liable as director in the meantime.
In fact, the resignation becomes enforceable against third parties by being published. It is for this very reason that some people infer that as long as the resignation has not been published, the former director can still be held liable by third parties. We do not subscribe to this view. The resignation is a unilateral act taking immediate effect; it does not even have to be accepted by the company. So once the director has resigned, he cannot longer be held liable.
The obligation to publish the resignation has another purpose than ceasing the director’s liability. As long as the director’s resignation has not been published, and therefore is not enforceable against third parties, third parties may assume that the director has the power to represent the company (which also implies that the company will be bound by the actions performed by the former director), unless it is demonstrated that the third party has learned about the resignation in some other way.
The mechanism to protect third parties cannot be extended to the liability of the former director. The liability of directors is a fault-based liability. A director who has resigned, does no longer have the power to represent the company or make decisions with regard to it. This implies that he cannot longer commit faults in his capacity as director, and that he cannot longer be held liable as from the moment he has resigned.
However, the following observations need to be made:
- Within the limits of the statute of limitations and/or discharge regulations, the director remains liable for all actions (or non-actions) that have been made prior to his resignation. The reference point is the moment at which the fault is committed. In principle, it is not relevant that the harm occurred after his resignation.
- The director remains liable if he continues to perform management actions after having resigned.
- The resignation itself can be a management fault when it has been made untimely. Indeed, in some cases, directors must remain in office until they are formally replaced. This is for instance the case if the minimum number of directors required by law or by the articles of association is no longer met; or if the director performed specific tasks that can only be orderly transferred if he stays in office for some more time…
For more detailed information about this issue, please see: R. Tas, “Een bestuurder is niet meer aansprakelijk voor fouten na zijn (niet-gepubliceerd) ontslag”, TRV 2014, 138-146.
Pieter Van Braband, intui attorneys