Is a shareholder liable for company debts?

Not for commercial debts; the shareholder is only obliged to pay the capital subscribed (TCC Art. 573). Public debts are different: shareholders are directly liable for tax and social security debts in proportion to their capital shares (Law No. 6183, Art. 35).

Does resigning as director end liability?

Not automatically. The resignation must be registered with the trade registry and announced; an unregistered resignation cannot be asserted against third parties. Liability for obligations arising during the term of office also continues.

Is a general assembly resolution required for a share transfer?

In limited liability companies the transfer of capital shares requires general assembly approval unless the articles provide otherwise (TCC Art. 595). In joint stock companies the transfer of registered shares may be restricted by the articles. The articles should therefore be reviewed before any transfer.

Corporate Law

End-to-end management of incorporation, share transfers, general assemblies, mergers, demergers and liquidation.

Corporate law covers the entire life cycle of a business, from incorporation to liquidation. A decision taken correctly at formation can prevent a shareholder dispute years later.

What it covers

Incorporation of joint stock and limited liability companies, capital structuring, share transfers, general assembly and board procedures, mergers, demergers and conversions, liquidation, shareholders’ agreements and director liability.

Why the articles of association matter

The articles are the company’s constitution. Most companies are incorporated using a standard template — yet matters such as restrictions on share transfer, pre-emption rights, general assembly quorums and the scope of the director’s representative authority must be addressed there. If they are not, the parties fall back on the default statutory rules when a disagreement arises.

Director liability

Shareholder liability is in principle limited to the capital subscribed (TCC Art. 573). Directors, however, are liable to the company, the shareholders and creditors for damage arising from the culpable breach of duties under the law or the articles (Art. 553; applied to limited companies by the reference in Art. 644).

The most significant exception concerns public receivables: tax and social security debts that cannot be collected from the legal entity are collected from the personal assets of legal representatives (Law No. 6183, repeated Art. 35). Many directors discover this exposure late.

Our approach

We prefer to advise companies on a continuing basis from incorporation onward. Maintaining the resolution book properly, holding general assemblies in due form and defining authority clearly eliminates most later liability disputes before they begin.

Learn More

Incorporation and registration
Share transfers and pledges
General assembly and board matters
Mergers, demergers, liquidation

Frequently Asked Questions

Is a shareholder liable for company debts?: Not for commercial debts; the shareholder is only obliged to pay the capital subscribed (TCC Art. 573). Public debts are different: shareholders are directly liable for tax and social security debts in proportion to their capital shares (Law No. 6183, Art. 35).
Does resigning as director end liability?: Not automatically. The resignation must be registered with the trade registry and announced; an unregistered resignation cannot be asserted against third parties. Liability for obligations arising during the term of office also continues.
Is a general assembly resolution required for a share transfer?: In limited liability companies the transfer of capital shares requires general assembly approval unless the articles provide otherwise (TCC Art. 595). In joint stock companies the transfer of registered shares may be restricted by the articles. The articles should therefore be reviewed before any transfer.

The information on this page is for general information only and does not constitute legal advice. Legislation and case law change; your situation must be assessed on its own facts.