The Supreme Court establishes that the statute of limitations for the action of liability of administrators for corporate debts

The following judgement resolves an appeal in cassation against a judgement of the Provincial Court of Zaragoza that had upheld the claim of a company creditor against the administrator of a company that had not presented the annual accounts for several years and that, as a result, was subject to legal grounds for dissolution. The Provincial Court had considered that the action for liability of directors for company debts was subject to the four-year limitation period, which is calculated from the time the director ceases to be a director.

It is an action for debt owed by others

The Supreme Court, on the other hand, considers that the action for liability of directors for company debts is an action for the debt of others, which is based on the mere legal recognition of the director’s liability. Therefore, the limitation period for this action should be the same as that of any action for debts owed by others, which is the four-year period provided for.

The Supreme Court points out that the Provincial Court’s interpretation, which subjects the action for liability of directors for company debts to the limitation period, would be contrary to the nature of this action. Indeed, if the limitation period for this action were the four-year period provided for in the law, this would favour the company administrator, since this period would be computed from his or her dismissal, which could occur at any time after the time at which the debt became payable to the company.

To avoid this, the Supreme Court upheld the appeal in cassation and declared that the limitation period for the action for liability of directors for company debts would be counted from the time when the debt became payable to the company.

If you have any doubts regarding this issue, please do not hesitate to contact us by telephone at Núria Martí García or by e-mail at nmg@btsasociados.com, we will be delighted to help you.