Liability is not extended to the director without proving the requirements of art. 59 (CSJN, «Carballo v. Kanmar»)
In «Carballo v. Kanmar» (2002) the Supreme Court reversed the extension of liability to the company's director because the requirements that make it applicable had not been proven (art. 59 LGS). It reaffirmed that the distinct personality between the company and its directors is the foundation of company law.
«Carballo, Atiliano c/ Kanmar S.A. (Escala Constructora S.A.) y otros»
What was at issue
Whether the company's director could be held jointly and severally liable for labor debts without establishing conduct falling within the prerequisites of directors' liability.
What was decided
The Court reversed the judgment against the director: extending liability requires proving the mismanagement or the fraudulent or abusive conduct required by art. 59 LGS.
It emphasized that the distinction between the company's personality and that of its directors is a pillar of company law that cannot be disregarded without grounds.
- The director's liability (art. 59) is not presumed: it must be proven.
- The distinct company/director personality is the rule.
- A breach by the company is not enough, on its own, to hold the director liable.
Source: CSJN, «Carballo, Atiliano c/ Kanmar S.A. y otros», 31/10/2002 — CSJN case-law
Practical application
It strengthens directors' defense against automatic 'extension' judgments and requires the claimant to identify and prove the director's reproachable conduct.
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