The role of a company administrator involves much more than managing the day-to-day business and in certain situations, poor management, prolonged inaction or failure to comply with legal obligations can result in company debts falling directly on the administrator’s personal assets.
The administrator’s liability for debts is one of the main concerns for both administrators and creditors facing insolvent or inactive companies. Knowing when this transfer of liability can occur is decisive for acting in time, whether to defend yourself or to claim a debt effectively.
At BUFET GÓMEZ FERRÉ as lawyers specialising in administrator liability and credit recovery, we explain below when an administrator can be held personally liable and how to legally claim those debts.
¿When does the administrator respond personally?
As a general rule, the debts of a company are only covered by the company’s assets, however, this protection is not absolute. The law provides specific cases in which the company administrator can be held liable for debts with their own personal assets.
One of the most common cases occurs when the administrator fails to comply with their legal duties, especially in situations of economic crisis or insolvency. Among the most frequent cases are:
- Failure to promote the dissolution of the company when there are legal grounds for it, such as losses that reduce the net assets below half of the share capital.
- Failure to file for insolvency proceedings within the legal timeframe when the company is insolvent.
- Negligent or disloyal management, artificially prolonging the business activity despite knowing that obligations cannot be met.
- Abandonment of the company, failure to file annual accounts or total absence of activity.
In these scenarios, the law allows creditors to initiate a credit claim against administrators, demanding direct payment of debts incurred after the cause of liability arose.
Types of debts that can generate administrator liability
Not all debts automatically give rise to personal liability, but there are certain areas where the risk is higher. The impact of debts on the administrator can occur, among others, in the following situations:
For creditors, correctly identifying the type of debt and the moment it was generated is key to claiming the debt from administrators with guarantees of success.
Legal procedure to claim against the administrator
The credit claim against administrators requires a well-defined legal strategy, as it is not only about claiming a debt, but about proving that the administrator breached their legal obligations and that said breach caused direct harm to the creditor.
The situation becomes especially complicated when the debtor company enters insolvency proceedings and lacks sufficient assets to cover the payment. In so-called massless insolvency proceedings, the route against the company is usually ineffective, but actions against the administrators may still exist if negligent management is proven.
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If you are in this situation, you can find more information in our guide on
claiming debts from companies in insolvency proceedings with no assets, where we analyse the deadlines, requirements and real options for recovering the debt.
Typically, the procedure for claiming against the administrator follows these phases:
- 1. Preliminary case analysis
The situation of the company is studied, its financial status, the moment when the debt arose and the administrator’s conduct. Here, the involvement of a lawyer expert in corporate and commercial law is essential to determine whether there are signs of liability.
- 2. Extrajudicial claim
In many cases, it begins with a formal demand to the administrator, recording the non-payment and the personal liability attributed to them, which can facilitate an early resolution or strengthen the creditor’s legal position.
- 3. Judicial claim
If there is no response or it is insufficient, a lawsuit is filed for administrator liability for debts, requesting personal payment of the debt. In certain cases, precautionary measures may be requested to prevent the concealment or disposal of assets.
This type of proceedings requires procedural experience and specific knowledge in debt recovery lawyers for administrator debts.
Advantages of having a specialised lawyer
Whether you are a creditor or an administrator, having a lawyer specialising in corporate liability makes a decisive difference.
From the creditor’s perspective, a professional can help you to:
- Determine whether it is viable to claim against an administrator.
- Correctly prepare the monetary claim.
- Maximise the chances of collection against companies without assets.
From the administrator’s defence, a lawyer can:
- Prove compliance with legal duties.
- Prevent an improper transfer of liability.
- Advise in insolvency or dissolution situations.
In these cases, at BUFET GÓMEZ FERRÉ, as commercial and insolvency law lawyers in Barcelona, we intervene both in the credit claim against administrators and in the defence against this type of actions.
Frequently asked questions
Contracts, unpaid invoices, balance sheets, annual accounts, commercial communications and any evidence that proves the debt and the administrator’s conduct. If you wish, you can contact us so that we can indicate, based on your specific case, everything necessary to proceed with the claim safely.
Yes, if they demonstrate that they acted with diligence, called the meeting on time, filed for insolvency proceedings when appropriate or did not participate in the decision that generated the debt. They can also be exonerated by showing that their decisions were made with sufficient information and good faith, following the principles of the “business judgment rule”.
It depends on the case, but it usually ranges between 6 and 18 months depending on the complexity, although proceedings with appeals, complex insolvency cases or international requirements can extend it a bit longer.
In these cases, the claim can become more complicated, but it is still possible to explore direct actions against other liable parties, such as de facto administrators, or explore alternative civil routes. If you contact us, we can evaluate the best strategy to try to recover the debt.
Free lawyer consultation – Lawyer for administrator liability in Barcelona
Free lawyer consultation: If you are facing an insolvent company or suspect that an administrator may be personally liable for the company’s debts, we recommend acting quickly, therefore, we offer you to send your free initial consultation to our lawyer expert in administrator liability, this way we can analyse your case, assess the viability of the claim and propose the most appropriate legal strategy to protect your interests and recover outstanding credits.
You can find more information about this service on our Credit claims against administrators page.