Civil liability of company directors and officers

Q: Can a director be sued after their term of office has ended?

Yes. A director remains liable for faults committed during the performance of their duties, even after their mandate has ended. The discharge (“quitus”) granted by shareholders does not exempt them from liability towards the company or third parties when the conditions for civil liability are met. French courts assess, on a factual basis, the existence of the fault, the damage, and the causal link.

Is your liability being challenged or do you wish to pursue the liability of a current or former director? Our firm can assist you.

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Civil Liability of Company Directors: Understanding the Legal Basis and Key Issues (France)

Whether they are managers, directors, chairpersons or CEOs, corporate directors incur personal civil liability when they commit faults in the performance of their duties under French law.

Important: The grant of “quitus” by the general meeting does not release a director from liability towards the company or third parties under French corporate law.

Which persons are concerned by the civil liability of directors?

French case law takes a broad approach to the notion of “director” (dirigeant), including:

‍de jure directors: formally appointed officers (managers of a SARL, chairpersons of an SA, board members, CEOs, etc.)
‍de facto directors: any person who, in practice, independently and continuously performs acts of management or direction, even without an official mandate

All directors may incur liability, including after the end of their office, for faults committed during their term.

Who may bring a civil action against a director?

Under French commercial law, civil liability of a company director may be initiated by:

‍the company itself, in cases of mismanagement
‍the shareholders, when they suffer a separate personal loss
‍third parties, such as creditors or business partners, in cases of a fault “detachable” from the director’s functions

What conditions must be met to incur a director’s civil liability?

Three cumulative conditions are required under French civil liability rules:

‍A fault: mismanagement, breach of the articles of association, breach of the duty of loyalty, excessive risk‑taking, etc.
‍A damage: suffered by the company, shareholders, or a third party
‍A causal link: the fault must be the direct cause of the damage

What remedies are available to the company and shareholders against a director?

The action depends on whether the damage concerns the company or the shareholder personally:

‍corporate action (action sociale): brought by the company (or by shareholders acting ut singuli) to repair damage suffered by the company
‍individual action: available to shareholders when they suffer a personal loss distinct from that of the company

Important: a shareholder may lose the ability to bring an individual action if they knowingly voted to grant “quitus” to the director.

What remedies are available to third parties (customers, suppliers, partners, etc.)?

As a principle, third parties (creditors, business partners, clients) must act against the company, which has its own legal personality and assets. Directors benefit from this corporate veil.

Exceptionally, a director may be held personally liable when they commit a wilful misconduct of particular gravity, incompatible with the normal performance of corporate duties (fraudulent schemes, deliberate concealment of information, misappropriation of assets, etc.).

Why consult a lawyer when a director is facing liability claims?

Civil actions against directors under French law are legally complex and potentially severe. Acting swiftly is essential to secure evidence, assess the lawfulness of decisions, and identify the alleged faults.

Our law firm can assist you:

‍for claims, to establish the fault, demonstrate the damage, and obtain protective measures or compensation
‍for defence, to demonstrate absence of fault, compliance with the company’s interest, or absence of causal link — and to negotiate settlements where appropriate
for risk prevention, by auditing governance structures, delegated authorities, and internal procedures

Contact us now to obtain a tailored quote and protect your interests.

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Frequently Asked Questions

When can the civil liability of a company director be engaged by the company or by the shareholders?

A director’s liability may be engaged when they commit a fault in the performance of their duties, such as mismanagement, breach of the company’s articles of association, or a breach of their duty of loyalty. Under French law, this fault must have caused damage to the company or to its shareholders, and a direct causal link must be established between the fault and the loss suffered.

Both de jure directors and de facto directors may be held liable.

Who can bring a liability action against a director?

A liability action may be brought by the company when it suffers harm resulting from a management fault, and by shareholders when they can demonstrate personal damage that is distinct from that suffered by the company.

Third parties — such as creditors or business partners — may only take direct action against a director in the event of a separable fault (“faute détachable”), meaning an intentional fault of particular seriousness, incompatible with the normal performance of corporate duties under French law.

Can a director be sued after their term of office has ended?

Yes. A director remains liable for faults committed during the performance of their duties, even after their mandate has ended. The discharge (“quitus”) granted by shareholders does not exempt them from liability towards the company or third parties when the conditions for civil liability are met. French courts assess, on a factual basis, the existence of the fault, the damage, and the causal link.