The duties of an administrator are regulated by law, the articles of association, and the resolutions of the general meeting of shareholders, so their liability will be analyzed from these perspectives to determine if their actions may constitute grounds for attracting liability.
It is worth remembering that, according to Article 70, paragraph (1) of Law no. 31/1990, “Administrators may perform all operations necessary to achieve the company’s object of activity,” including the right to dispose of the company’s assets (e.g., removal from the patrimony or renting for more than three years) without the need for a special proxy, that is, a resolution of the general meeting of shareholders.
The articles of association may require such a resolution in specific cases (e.g., sale of assets or contracts exceeding a certain value). Such a provision is especially recommended if the administrator is an external party to the shareholders, at least until it is established that they possess the necessary competencies that match the company’s needs.
The liability of administrators towards the company is also applicable in cases provided by Article 73 of Law no. 31/1990, jointly, for the reality of contributions made by shareholders, the actual existence of dividends paid, the presence of legally required registers, their proper maintenance, exact fulfillment of general meeting resolutions, or strict fulfillment of the duties imposed by law or the articles of association.
Thus, as long as the administrator’s duties are performed within the limits outlined above, they do not bear financial liability for the obligations they contract in the name of the company.
However, if the performed activities exceed the scope of the given mandate, the general meeting of shareholders may decide by the legally required majority to attract the administrator’s financial liability and, consequently, oblige them to cover any damages caused to the company.
If a decision has been made to initiate legal action against the administrator, their mandate automatically ceases, and a new administrator must be appointed by the company’s shareholders.
Legal action is mandatory; the company cannot directly charge the damage caused by the administrator but requires the competent court to analyze the actions taken, the administrator’s culpability, and the damage caused, considering the defenses presented by the defendant.
If all the aforementioned conditions are met, the court will grant the request and will order the former administrator to compensate for the damages caused to the company.
The liability mentioned above is for their own actions; however, the administrator may also be liable to the company on behalf of those to whom they have delegated the right of representation.
Thus, liability may be incurred for failing to properly exercise the delegation and representation rights, leading to financial liability for another person.
In this regard, if the administrator’s duties are not specified in the articles of association, it is recommended to conclude a mandate contract containing relevant clauses that define the actions that may lead to financial liability.
On the other hand, we reiterate the importance of thoroughly analyzing the consequences of a contract before its conclusion to avoid situations where the company is unable to fulfill its assumed obligations.
For further information or any additional inquiries, please do not hesitate to contact us:
➡ Phone: (+4) 031 426 0745
📧 Email: office@grecupartners.ro
We are here to assist and provide legal support for all your needs. We look forward to discussing with you.
Daniel Pavelescu – Attorney at Law
