COMMERCIAL LAW: Responsibility in the administration of commercial companies.

Before addressing the question posed, it is pertinent to highlight that the administration of a commercial company, particularly with regard to Limited Liability Companies (S.R.L.) and Public Limited Companies (S.A.), falls on the figure of one or more managers or a directory. The members of this administrative body can be partners, shareholders or individuals external to the corporate structure.

Along these lines, it is imperative that the people designated to exercise the administration of a company conduct themselves under the premise of the diligence and loyalty characteristic of a prudent businessman. This implies that directors must perform their functions with a professionalism in line with the responsibilities inherent to their position, guaranteeing at all times the protection of the interests of the company. They must, therefore, refrain from carrying out any act that could harm the entity.

In the outlined context, it is established that the administrators will be liable, jointly and unlimitedly, towards partners, shareholders or third parties, for actions or omissions carried out without the required due diligence and loyalty. This includes the obligation to respond civilly for damages caused by fraud, abuse of power, malicious acts or gross negligence. Likewise, there is the possibility of facing criminal actions if, in the exercise of their functions, the commission of any illegal act is presumed.

It is crucial that individuals who assume the role of administrator are thoroughly informed about the obligations that their position entails. Likewise, it is essential that their actions are always framed within the legal limits and the powers that have been conferred upon them, with the aim of preventing potential adverse legal repercussions.

Finally, directors are recommended to maintain clear and open communication with partners and shareholders, providing regular reports on the management and results of the company. Likewise, it is advised that, when making highly relevant decisions, you seek professional advice to adequately evaluate the possible legal, financial and operational risks you may face.

Víctor Manuel Vásquez Alfaro
Litigation and Corporate Lawyer