Liability actions against corporate officers

A manager or director — often the very partner who handles the company's finances — made decisions that harmed the company or diverted funds for personal gain, and you want them held liable with their own assets. These claims require proving a breach of the duty of loyalty and diligence.

The standard of conduct required of officers

Article 59 of Law 19,550 requires officers and representatives to act with the loyalty and diligence of a good businessperson. Anyone who fails to meet those duties is unlimitedly and jointly liable for the damages resulting from their action or omission.

Article 274 sets out directors' liability toward the company, shareholders and third parties for mismanagement, violation of the law, the bylaws or internal regulations, and for any other harm caused by willful misconduct, abuse of authority or gross negligence.

Corporate action and individual action

The corporate liability action (articles 276 and 277) seeks to repair the harm suffered by the company and, in principle, requires a shareholders' resolution; it may be brought by the company, by shareholders under certain conditions, or in the event of bankruptcy. The individual action (article 279) belongs to the shareholder or third party directly harmed in their own assets.

Correctly determining which action applies, who has standing, and against whom it should be directed is decisive for the success of the claim.

How we approach the claim

We reconstruct the officer's challenged conduct, quantify the damage and assess the available evidence, including minutes, financial statements and documentation of the transactions in question.

We also consider the possible discharge of liability under article 275 and the officer's defenses, to anticipate the scenario and strengthen the client's position.

Common mistakes

• Confusing the corporate action with the individual action and getting standing wrong
• Failing to quantify or document the specific damage
• Approving management at a shareholders' meeting without realizing it may discharge liability (article 275)
• Delaying the claim and compromising the evidence of the facts
• Bringing a claim without proving the causal link between the conduct and the harm

Frequently asked questions