Directors' liability

Directors' liability: what are your risks as an entrepreneur?

As an entrepreneur, you may choose a legal structure such as a sole proprietorship, general partnership (vof), or private limited company (bv). While a sole proprietorship or a general partnership offers tax advantages, it also carries risks: you are personally liable for the debts of the business with your private assets. In a bv, that liability is generally limited. However, private liability for directors is not completely excluded in a bv.

When is a director liable?

Director liability means that you, as a director, can be held personally liable for damages or debts of the company. The law recognizes different grounds:

• Internal liability: liability towards the company itself, for example in the case of mismanagement.
• External liability: liability towards third parties, such as creditors, in case of deception or negligence.
• Bankruptcy liability: when the bankruptcy trustee determines that there is apparent mismanagement.

The threshold is high: you are allowed to take risks and make mistakes as an entrepreneur. Only in cases of seriously blameworthy conduct does the risk arise that you could be held personally liable.

Prevent personal liability

You do not need to be a lawyer to make good choices, but you do need to be vigilant. Are you considering an important decision within your business, are you unsure about a particular course of action, or do you want to know how you can limit liability risks? Our corporate law attorneys are ready to provide you with clear advice and practical support.

Contact us

Do you want to know more about director liability or do you have a specific case in which you are at risk? Then please contact one of our specialists. We will think along with you and ensure that you operate with confidence.