What are the obligations
in the responsibility of the administrator of a company
? How far does that responsibility go? How many years does it take to prescribe actions against this responsibility?
These are common questions that arise around the role of the business administrator, a figure collected
by the Law on Capital Companies, which
determines that any company of a commercial nature is obliged to have a management body responsible for its management.
In this article we want to detail the essential points on the responsibility of the administrators of capital companies,not only in the corporate or commercial field, which is probably the best known, but in other aspects such as tax, labor or even criminal.
Who is the administrator of a society and what types exist?
But, before we go into detail, we need to answer the following question: what is a company administrator?
It is the natural or legal person responsible for managing the proper functioning of a company, as well as representing it in the relationship with all its audiences: bodies, creditors, customers, partners, etc. That is, your representative for all purposes and the person who has the highest hierarchy in decision-making.
The position of administrator of a company may fall to one or more natural or legal persons and, depending on the type of company and the roles of the administrator, the administrator can be a single administrator, a solidarity administrator or a joint administrator.
According to Article 210.1 of Title VI of the Corporations Act (LSC), “the administration of the company may be entrusted to a single administrator, several administrators acting jointly or jointly or to a board of directors”.
Duties of a company’s administrators
Before explaining the responsibility of a company’s administrators, it is imperative to know that they are also subject to a number of duties.
Among the main duties that each administrator must fulfill are the following:
- General duty of diligence. Administrators shall perform the office and perform the duties imposed by laws and statutes with the diligence of an ordained employer, taking into account the nature of the office and the functions assigned to each of them.
- Protection of business discretion. It is to consider that in the field of strategic and business decisions, subject to business discretion, the standard of diligence of an orderly employer shall be understood to be met where the administrator has acted in good faith, without personal interest in the matter under decision, with sufficient information and in accordance with an appropriate decision-making procedure.
- Duty of loyalty,which obliges, among other responsibilities, not to exercise its powers for purposes other than those for which it has been granted, to keep secret about the information, data, reports or background to which you have had access in the performance of your office.
- You must avoid conflict-of-interest situations,such as transacting with society, making use of social assets, taking advantage of the company’s business opportunities, or obtaining advantages or remuneration from third parties other than the company and its group associated with the performance of its office.
The responsibility of administrators
On a regular basis, it tends to be thought – by mere disrecognisement – that the responsibility of administrators is limited to making “a couple of signatures a month”,but nothing further from reality.
As the highest representatives of companies, the responsibility of the administrators goes much further and entails the fulfilment ofa number of legal obligations, so the omission of these can entail a number of responsibilities in various areas.
Title VI of the Corporations Act corresponds to the responsibility of the administrators and the first point (236.1) leaves no room for doubt:
“Administrators will respond to society, in front of partners and to social creditors, damage caused by acts or omissions contrary to law or statutes or by those performed in breach of the duties inherent in the performance of the office, provided that he has intervened in harm or guilt. Depending on the transgressed rule, we can face various types of responsibility.”
However, when we refer to the scope of an administrator’s responsibilities, we must start from the premises of good faith, honesty and loyalty to the company.
In addition, its performance must be actively developed. Therefore, omissionsmust also be taken into account in respect of their legal, statutoryor of any kind, provided that they are grounds for damages to society.
For example, if a decision made jointly by the partner board causes a financial hole, responsibility will continue to fall on the company administrator.
Together with tax obligations, it must be taken into account that the tax legislation itself also establishes the responsibility of administrators for tax debts.
Therefore, the responsibility of the administrator can make him respond with his personal debt assets of the company he manages.
This is the case with tax debts, in which the Treasury will attempt to extend the responsibility of the administrator by claiming the debt if the company cannot pay for not having enough assets or being dissolved at that time.
Responsibility for administrators can also be transferred to the criminal sphere.
Actions or omissions carried out by an administrator contrary to the Law or the bylaws of the company, or those carried out in breach of the duties of his office, shall be understood as criminal conduct and, therefore, capable of being imputed.
These penalties may consist of imprisonment, fine and professional disqualification, for which legal advice would be necessary.
Before we have detailed what are the duties of the administrators of a company (loyalty, good faith, better interest for society…).
However, if you do not comply with them, it may result in the administrator having to compensate for the damage caused to the social estate with his own assets,and return to the company the property damage caused.
Job and Social Security Responsibility
The administrator, as representative and manager of the company, assumes the same employment obligations as a personal employer with respect to his employees in matters of recruitment, respect for basic labour rights, remuneration, Social Security, prevention, promotion, vocational training, information and consultation with workers’ representatives, negotiation, etc.
Therefore, in the field of work, the responsibility of the administrators is based on the fact that they assume tasks and responsibilities of management and organization together with the employer.
Solidarity of responsibility
As we have mentioned, the responsibility of the administrators reaches all their personal heritage, in any of the areas of their obligations.
However, an important point to keep in mind is that joint administrators and members of the Board of Directors will respond, where appropriate, in solidarity.
There are only 2 exceptions to this rule: to prove that they had not taken part in the agreements, or to prove that they were unknown, that they voted against them, or that they did everything in their power to prevent it.
Prescribing the responsibility of a company’s administrators: four years
To demand accountability to administrators it is necessary to know when it prescribes such responsibility.
According to Article 241a of the LSC, “the action for liability against administrators, whether social or individual, shall prescribe fouryears from the day on which it could have exercised”.
That is, both social and individual action and debt liability will have the same limitation period.
Conclusions on administrators’ responsibility
With all that has been mentioned, it is clear that the responsibility of a company’s administrators is not without risks.
Holding this position can be a very sweet candy for many entrepreneurs, but we must always have presents the legal obligations imposed on administrators.
Only non-compliance with your respective obligations can lead to problems ranging from damages you face with your personal property to disqualification. Or, at worst, and as we have seen from the point of view of criminal responsibility, receive a sentence to several years in prison.