Approach to the problem
Law 31/21014 of December 3, 2014, which amends the Capital Companies Law in matters of corporate governance (the “Law 31/2014”), introduced a new rule regarding the deadline for the exercise of liability actions of directors of capital companies. This is the already well-known article 241 bis of the Capital Companies Act (“LSC”). It provides as follows:
“Liability actions against directors, whether corporate or individual, shall be barred after four years from the day on which they could have been exercised”.
Against this is Article 949 of the Code of Commerce (“CCom”), according to which:
“The action against the managing partners and administrators of companies or partnerships shall terminate after four years, to be counted from the day when for any reason they cease in the exercise of the administration”.
The difference is clear: with this provision, the dies a quo for the computation of the term changed from the moment of the cessation (article 949 CCom) to the day on which the action could be brought (article 241 bis LSC), which is nothing more than the incorporation of the general rule of article 1969 of the Civil Code (“CC”) into the corporate system.
Could, with this modification of the rules, the problem of the statute of limitations period, which had generated so many discussions, be considered to have been settled and a definitive solution finally established, which in this point provides the necessary element of legal certainty to the actions for liability of directors?
Unfortunately, no. Since 2014, a relevant discussion has been kept alive around the scope of action of article 241 bis LSC: whether or not it is applicable to the liability action for corporate debts of article 367 LSC.
Nine years later, the question has reached the Supreme Court and is resolved in its Ruling No. 1512/2023, of October 31, which we will refer to as the “STS of October 31, 2023”. We will now see in what terms. A preview: whoever does not know it, may be surprised.
State of affairs prior to the STS of October 31, 2023
Since Article 241 bis LSC saw the light of day, the doctrine and the courts have been divided into two positions in order to find an answer to the problem raised.
In the doctrine, there were soon those who understood that this precept is only applicable to the social and individual actions, but not to the liability for corporate debts. We can cite authors such as Carrasco Perera, Á., “El nuevo régimen legal de prescripción de las acciones de responsabilidad contra los administradores sociales”, in Análisis GA&P, of March 18, 2015; De las Heras García, M. D., “Responsabilidad de los Administradores Sociales”, in the Curso La reforma de la Ley de Sociedades de Capital para la mejora del gobierno corporativo, Cámara Oficial de Comercio, Industria, Servicios y Navegación de Cartagena, April 16, 2015; or Pérez Benítez, J. J., “El administrador societario: Una profesión de riesgo. La responsabilidad del administrador tras la Ley 31/2014, de 3 de diciembre”, in Revista de Derecho Mercantil, El Derecho, No. 30, May 2015. All of them considered that, article 241 bis LSC not being applicable, the action for liability of directors for corporate debts remains subject to the limitation period of article 949 CCom.
Others, on the other hand, held that Article 241 bis LSC establishes a common term applicable to all liability actions regulated in the LSC, including liability for corporate debts. This option was favored by Cabanas Trejo, R., “Sobre el nuevo sistema de cómputo de las acciones de responsabilidad contra los administradores”, in Diario La Ley, nº 8513, Sección Tribuna, 7 April 2015; or Massaguer Fuentes, J., “Art. 241 bis”, in Comentario de la reforma del régimen de las sociedades de capital en materia de gobierno corporativo (Ley 31/2014), Juste Mencía, J. (coord.), Madrid, 2015, p. 482.
Detailed reference will not be made to the arguments in favor of each of the theses indicated. Their development can be consulted in some works that the present writer prepared years ago (García-Villarrubia Bernabé, M., “La prescripción de las acciones de responsabilidad de administradores. El supuesto de la responsabilidad por deudas sociales y la responsabilidad de los liquidadores”, in El Derecho. Revista de Derecho Mercantil, n.º 31, 2015; and, with updated case law references, “Responsabilidad de administradores de sociedades”, in Practicum daños 2019, Del Olmo García, P. and Soler Presas, A. (coords.), Navarra, 2018).
As regards the criterion held by our courts, in the document entitled “Conclusions. Jornadas de Magistrados especialistas en mercantil” (JUR 2016/14281), held in Pamplona from November 4 to 6, 2015, the following could be read:
“Regarding the possible application to the action of liability for debts, it was understood by the majority that the rule of art. 949 of the Commercial Code should continue to apply, from the termination of the administrator”.
It would seem, therefore, that at that time there was an inclination to opt for the first of the aforementioned theses. The question, however, was far from being resolved. In fact, during these years there have been pronouncements in both directions in the practice of our Provincial Courts. Let us give just a few examples that will help us to situate ourselves.
The Provincial Court of Pontevedra has traditionally considered that article 241 bis LSC is not applicable to the action of liability for corporate debts. According to its opinion, this action is subject to the term of article 949 CCom. It is worth citing the Judgments of 18 and 25 May 2017 (JUR 2017/164648) and (JUR 2017/177039):
“However, we understand that the deadline for the exercise of the action of liability for debts has fallen outside the scope of application of the rule, as we pointed out in our judgment of 31 March last (appeal 50/16, ECLI:ES:APPO:2016:488). Not only because of the literal and systematic arguments (the precept is immersed within the chapter dedicated to the liability of the administrators for the damages caused to the company and to third parties in the framework of individual and corporate actions, in Chapter V (“The liability of the administrators”) of Title VI (“The administration of the company”) of the LSC; while Article 367 LSC is inserted in Chapter I (“Dissolution”), Section 2 (“Dissolution due to legal or statutory grounds”) of Title X (“Dissolution and liquidation”), but because we consider that the rule of computation from the termination is that which corresponds to the system of liability for debts, where the administrator, as long as he/she does not terminate, is obliged to comply with the corporate obligations, in addition to the fact that the purpose of the rule of Article 367 is to avoid that the company comes to be bound to comply with the corporate obligations. 367 is to prevent the company from contracting obligations despite being in a dissolution cause, representing its permanence in the traffic a situation of risk before current and potential creditors. In addition, the rule avoids evidentiary difficulties, since the creditor will only need to go to the registry to find out which persons hold the title of administrator, which at the same time avoids complex subjective inquiries as to when the creditor was or was not aware of the existence of the cause of dissolution. In short, the action for liability for debts does not sanction the administrator for negligent conduct causally linked to the production of damage to the creditor or the shareholder, but rather sanctions the breach of a legal duty, -that of not dissolving the company with cause to do so-, linked to the continuance in office of the administrator, hence the rule for calculating the four-year term continues to be the general rule of art. 949 CCom, a precept that continues to be in force. Consequently, since the defendants remained in office, -as further evidence of the neglect of their corporate duties, since the company, as has been agreed, lacks activity and is in a state of dissolution-, the action could not be time-barred”.
Against this, Section 15 of the Barcelona Provincial Court has shown itself to be in favor of the thesis that considers Article 241 bis LSC to be applicable. We cite as examples the Judgments of September 27, 2017 (JUR 2017\258753), June 15, 2017 (JUR 2017/182876) and February 5, 2018 (JUR 2018/84819):
“Article 241 bis LSC, entitled Prescription of liability actions, is applicable to the social action of liability of art. 238 LSC, to the individual action of art. 241 LSC and we estimate that also to the action of art. 367 LSC, given the absence of a specific rule and because it is an action of liability against the administrators for breach of their obligations, that is, of the obligations legally imposed on the administrators pursuant to arts. 365, 366 and 367 LSC”.
The STS of October 31, 2023
Thus, we come to the STS of October 31, 2023.
First, we refer very briefly to the background of the case and the decision of the Court of first instance, the Provincial Court of Zaragoza.
A creditor had filed a lawsuit against the director of a commercial company, in cumulative exercise of the individual actions for directors’ liability (articles 236 and 241 LSC) and liability for debts (article 105.5 LSRL, currently article 367 LSC). Previously, there had been a proceeding in which this creditor had sued the company claiming amounts for non-payment of the price of some supplies, with the result of a final conviction (the company had disappeared and it had not even been possible to verify its summons, which had to be served on the administrator). In the proceedings relating to the liability actions brought against the administrator, the Court, according to the background of the STS of October 31, 2023, “dismissed the claim, considering that the action was time-barred in accordance with art. 241 bis LSC”.
The plaintiff’s appeal was upheld by the 5th Section of the Provincial Court of Zaragoza in its Judgment No. 544/2020, dated July 13, issued by the 5th Section of the Provincial Court of Zaragoza (Roj: SAP Z 1663/2020). As the Supreme Court states,
“With regard to what is of interest here, it considered that art. 241 bis LSC does not apply to liability for debts, but that the applicable limitation period is that of art. 949 CCom, which is computed from the termination of the corporate director. As a consequence of this, since the administrator had not ceased to be a director, the action could not be time-barred, and considering that the requirements of art. 367 LSC were met, the first instance judgment was revoked and the claim was fully upheld”.
The Provincial Court of Zaragoza thus opted for the thesis of the inapplicability of article 241 bis LSC, with the result that article 949 CCom was applied to the case.
With this background, the Supreme Court addressed the question raised.
As a starting point, it states that the answer is necessarily linked to the nature of the action for liability for corporate debts. Its first passages are thus devoted to recalling the nature of this action, as opposed to that of purely corporate liability actions, i.e., corporate and individual, which are expressly referred to in Article 241 bis LSC. With these initial considerations, the High Court already points to a differentiation between the liability action for corporate debts, on the one hand, and the social and individual liability actions, on the other. Therefore, a solution far removed from Article 241 bis LSC.
As recalled by the STS of October 31, 2023, case law has traditionally understood that
“The justification for this liability lies in the risk that has been generated for subsequent creditors who have contracted without enjoying the sufficient patrimonial guarantee by the company of the fulfillment of its payment obligation.
In turn, judgments 367/2014, of July 10, 650/2017, of November 29, 316/2020, of June 17, and 669/2021, of October 5, have configured this type of liability as a liability for another’s debt, ex lege, insofar as its source – determining fact – is the mere legal recognition, which is specified in the breach of a legal duty by the corporate administrator, to which is attached, as a consequence, the joint and several liability of this administrator for the corporate debts subsequent to the concurrence of the cause of dissolution. And without prejudice to the need for its judicial declaration.
[…]
In short, the legal measure converts the administrators into personal and joint and several guarantors of the obligations of the company subsequent to the date of concurrence of the cause for dissolution”.
Based on the singular nature of the action of liability for corporate debts and, on the basis of classic arguments of statutory interpretation (criteria of literal and systematic interpretation; article 3.1 CC), the Supreme Court concludes that article 241 bis LSC does not apply to this action. The reasoning is as follows:
“Consequently, the limitation period cannot be that of art. 241 bis LSC, provided for individual and social actions, which refer to different cases.
The exclusion of art. 241 bis LSC is supported both by a literal interpretation of the rule and by a systematic interpretation (art. 3.1 CC). Firstly, the provision refers exclusively to the corporate action and the individual action of liability, not to the action of liability for corporate debts of article 367 LSC. Secondly, it is included in Chapter V (Liability of the directors) of Title VI (Administration of the company) of the LSC, while Article 367 LSC is included in Chapter I (Dissolution), Section 2 (Dissolution due to legal or statutory grounds) of Title X (Dissolution and liquidation).
To which must be added, as the most relevant fact, the different nature of the social and individual actions, which are typical actions for damages, and the action of liability for corporate debts, which is an action of legal liability for the debt of others with its own budgets (judgment 532/2021, of July 14, and those cited therein)”.
Up to this point, there can be no surprises. This interpretative option was one of the two that had been used up to that time and the Supreme Court opted for one of them on the basis of the same arguments that had been put forward by the supporters of that position. The solution may or may not be shared. But the fact of the Supreme Court’s pronouncement is positive. If this criterion is maintained, and there is no reason not to do so (in fact, in view of the agenda of Supreme Court rulings, there may be more resolutions on the way), we will find that the actions for liability of directors provided for in the corporate regulations are subject to a different limitation period: on the one hand, the individual and corporate actions, subject to the time limit of article 241 bis LSC; on the other hand, the action for liability for corporate debts. But what is the statute of limitations applicable to the latter?
I was expecting the STS of October 31, 2023 to say that, as a consequence of the above, the action is subject to the limitation period of article 949 CCom. But no. It is here that comes what could be considered a surprising or unexpected outcome. Let us see the reasoning:
“4. In line with the above, we also do not consider the provisions of article 949 CCom applicable to liability for debts, since after the introduction of article 241 bis in the LSC by Law 31/2014, of December 3, the scope of said precept has been circumscribed to partnerships, regulated in the Commercial Code, without being applicable to capital companies.
Law 31/2014 introduced art. 241 bis LSC as a special rule for capital companies and established a chronological connection between the production of the damage as a consequence of a conduct of the corporate director and the start of the computation of the actions to demand liability for it, regardless of whether or not he/she was still in office or the time elapsed since he/she left it. Since art. 949 CCom, although it offers the advantage of the chronological objectification of the period, has the disadvantage that it disconnects the moment of the production of that damage or of its external manifestation from the start of the limitation period, to the point that the paradox can occur in which the period begins to run before the latter occurs.
On this basis, the limitation period of the action of art. 367 LSC is that of the joint and several guarantors, i.e., the same limitation period as that of the guaranteed obligation (the corporate debt), depending on its nature (contractual obligations, arising from non-contractual civil liability, etc.). On the understanding that the relationship between the company and its responsible director is one of solidarity, because it arises from the acceptance of the position of director and from the provision of the precept itself -art. 367 LSC-, which confers it a legal character, although its judicial declaration is necessary. And consequently, the same interruptive effects of the statute of limitations are applicable to the administrator as would be applicable to the company, in accordance with articles 1973 and 1974 CC. Likewise, the dies a quo of the limitation period of the action against the administrator will be the same as that of the action against the debtor company”.
We say that the solution is not the expected one because until now it had been naturally assumed that, if article 241 bis LSC was not applicable, then article 949 CCom, not repealed by Law 31/2014, should be resorted to. In fact, the peaceful understanding of the case law prior to Law 31/2014 was that this action, as then the social and individual actions, were subject to the regime and limitation period of article 949 CCom. We can cite, for example, Supreme Court Rulings no. 759/2010, November 30 (Roj: STS 6385/2010), 770/2010, November 23 (Roj STS 7561/2010), or 59/2014, February 24 (Roj: STS 639/2014).
Contrary to the above, the Supreme Court understands that, as a consequence of Law 31/2014, Article 949 CCom is no longer applicable to capital companies and that its field of action has been reduced to partnerships. No further arguments are added in favor of this position. There is only one expression that is related to the Chamber’s position: “[…] following the introduction of Article 241 bis in the LSC by Law 31/2014, of December 3 […]”. Nothing more.
Law 31/2014, however, did not establish any provision as to what would be the scope of application of article 949 CCom after its entry into force. Its repealing provision merely stated that the provisions of equal or lower or lower rank that were opposed to its provisions were repealed. And those who have approached the problem analyzed here have naturally assumed the validity of article 949 CCom, focusing the discussion on whether or not article 241 bis LSC was applicable to the action of article 367 LSC and, depending on the sense of the answer to the question, whether or not it displaced the general rule of article 949 CCom by application of the principle of specialty.
The Supreme Court states, but does not argue, that the consequence of the entry into force of the reform operated by Law 31/2014, apparently by the mere fact of the introduction of a special -exclusive- statute of limitations rule for individual and social liability actions (article 241 bis LSC), is directly a limitation of the scope of application of article 949 CCom, which no longer applies to capital companies and is therefore a rule reduced in its field of play to personal type companies.
The justification has many reservations. In particular, it is not entirely shared that, as if it were a sort of cause and effect relationship, the result of the introduction of article 241 bis LSC by Law 31/2014 has been a sort of automatic reduction of the scope of application of article 949 CCom. It seems that there is here a logical leap that is difficult to justify.
The consequence, moreover, is relevant, because, as the Supreme Court later explains, since article 949 CCom is not considered to be applicable and the liability of the administrators ex article 367 LSC is joint and several with respect to the corporate debt claimed, its limitation period must necessarily be “the same limitation period that the guaranteed obligation (the corporate debt) has, according to its nature (contractual obligations, arising from tort liability, etc.)”.
Therefore, the solution goes beyond the fact that the director liability actions provided for in the LSC are not subject to a single limitation period. Furthermore, with regard to liability actions for corporate debts, there is no single time limit either, but it will depend on the nature of the corporate debt in question. Naturally, it can always be said that this is only a natural consequence of the configuration of the liability regime of article 367 LSC as a case of solidarity and that, in addition, it unifies the limitation period of the action with respect to the company and its administrators. But there is no doubt that it complicates things, because the exercise of determining whether or not the action is alive or not will require analyzing in each specific case what type of debt we are talking about. The variety of assumptions can be not minor (see, as an example, García-Villarrubia Bernabé, M., “Responsabilidad por deudas del art. 367 LSC: algunas cuestiones polémicas en torno al nacimiento de la obligación, en relación con la existencia de causa de disolución”, in El Derecho. Revista de Derecho Mercantil, n.º 47, 2016).
The specific case
Proof of what has been said is that, after giving the general solution, in its application to the specific case the Supreme Court has to carry out a double step: first, to establish the nature of the corporate debt claimed from the administrator and, therefore, the applicable limitation period; and, then, the determination of whether or not the action brought against the administrator is time-barred.
As regards the first step, the STS states that.
“since the debt arises from the non-payment of the price of a purchase and sale of goods, the limitation period for personal obligations of art. 1964 CC is applicable”.
Then, it refers to the time when the debt arose and the applicable rule, in the following terms:
“And since it was born in November and December 2009, it must be taken into account that Law 42/2015, of October 5, through its First Additional Provision, reformed the aforementioned art. 1964 CC, in the sense of reducing from fifteen to five years the limitation period for personal actions; and for legal relationships born prior to that, the Law itself provided for a transitional system.”
The High Court then analyzes that transitional system and concludes that, since the lawsuit was filed in 2019, the action was not time-barred, thus reaching the same final solution as that reached by the Provincial Court of Zaragoza, although for a different reason:
“Consequently, the action brought by the plaintiff, born in 2009, could not have been extinguished by prescription until October 7, 2020, because the five years of the residual term of the new law had already elapsed then. Therefore, the appeal must be dismissed, even though other legal arguments have led to the confirmation of the appealed judgment”.
Thus, the path to be followed from now on to determine whether or not a possible action for liability of administrators for corporate debts is time-barred.
But, in the analysis of the specific case, there is a problem. Or, following the terms used before, a little surprise. The final surprise. As the STS of October 31, 2023 states, the claimed debt arose in 2009. It is true that the lawsuit in exercise of the action was filed in 2019, preceded by an out-of-court claim in 2019. But the origin of the debt dates back to 2009. And, according to the background account of the STS of October 31, 2023 the cause for dissolution had already existed long before (the company “had not presented accounts since 2002 and, in those presented in that year, its net funds amounted to the sum of €8,992.31, while its share capital was €18,030.36”). But in 2009, evidently, neither Law 31/2014 nor article 241 bis LSC existed. Only Article 949 CCom, which was not limited in its scope of application to partnerships, as the STS understands it to be since Law 31/2014. Does the Supreme Court consider that Law 31/2014 determined the supervening change of the statute of limitations regime for debts arising before its entry into force, which went from being that of Article 949 CCom to being that of the corporate debt and that the computation of that period began the day after the entry into force of Law 31/2014, to then subject it to the transitional regime of application of the modification of the general limitation period of Article 1969 CC introduced by Law 42/2015, of October 5, according to the interpretation of Supreme Court Judgment no. 29/2020, of January 20 (Roj: STS 21/2020)? We do not know, although it can be intuited that probably the STS of October 31, 2023 does not analyze the problem from this perspective because it was not raised neither in the instances nor in house seat.
I end the commentary with the reproduction of some passages that seem to me of interest from the Judgment of Section 28.ª of the Provincial Court of Madrid No. 494/2018, of September 21 (Roj: SAP M 16385/2018), incidentally, in favor of the application of Article 949 CCom to the social action of liability for corporate debts, also after the reform of Law 31/2014. The Judgment explains how Article 241 bis LSC is to be temporarily applied to the individual action of liability of administrators. When dealing with the liability action for corporate debts, for the Court the problem does not exist because it understands that it was still subject to article 949 CCom. Now, after the STS of October 31, 2023, it remains to be determined whether the solution would be the same and, as it seems, it must be considered that the limitation period, no longer that of article 949 CCom but that of the corporate debt, began to run after the entry into force of Law 31/2014:
“[…] The argument concerning the temporal application of Article 241 bis LSC is applicable to the individual liability action. To address the issue, the appellant argues the application of said precept to the case at hand because the claim was filed after the entry into force of said precept, on December 24, 2014 by virtue of the reform operated by Law 31/2014 of December 3.
The referred argument is not admissible, because, starting from the fact that Law 31/2014 does not contain a specific transitional regime on the matter, we must apply the provisions of the Civil Code on transitional law. In this regard, Judgment No. 14/2018 of January 12 of the Supreme Court states the following:
The judge has to pay attention primarily to the provisions of transitional law contained in a law and, if they do not exist, to the rules that generally regulate matters of transitional law, i.e., the effects of the succession of rules in time, mainly Art. 2.3 and the transitional provisions of the Civil Code. If a given law does not contain any specific rule on transitional law, the judge must deny it retroactive effect by virtue of the provisions of Art. 2.3 of the Civil Code’.
Article 1.939 of the Civil Code contains a regulation on transitory situations in matters of prescription in the following terms:
‘Prescription commenced prior to the publication of this code shall be governed by the laws prior to the same; but if from the time it was put into observance all the time required therein for prescription has elapsed, the latter shall take effect, even if by said prior laws a longer period of time was required’.
According to said Rule, the new prescriptive periods established by the subsequent Law are applicable when all the time required therein for prescription has elapsed, computed from its entry into force.
Under the previous regime, the consolidated jurisprudential criterion was the application of the limitation period of four years from the date of the termination of the administrator, as provided in Article 949 of the Commercial Code. In this regard, the Supreme Court judgment no. 14/2018 of January 12, 2018 […].
In the present case, there is no record of the termination of the administrator, so that under the previous regime, the action for liability of administrators would not have started its limitation period. Consequently, the application of the above transitional regime leads us to the conclusion that the new regulations have led to the commencement of the limitation period, but its computation must be made from the entry into force of the Law and not from previous temporary moments.
This same criterion is the one adopted by other Provincial Courts, such as the 15th Section of the Provincial Court of Barcelona, which in its judgment no. 383/2017 of September 27, 2017 has stated the following:
‘In cases, such as the present one, in which the liability action for acts or omissions committed prior to the entry into force of the Law against the administrator with a current position and that, therefore, at the entry into force of Law 31/2014 the limitation period has not yet started, it is subject to the new initial day of the computation – day on which the action could have been exercised -, from the date of entry into force of the aforementioned Law. Consequently, based on art. 241 bis LSC, the dies a quo of the limitation period of the action exercised in the present case is that of the entry into force of the Law and not that of the date on which the action could have been exercised’.
Since Law 31/2014 entered into force on December 24, 2014, it is obvious that at the date of filing of the lawsuit (May 22, 2015) the four-year period indicated in the new article 241 bis LSC had not elapsed, so that the exception cannot be accepted.
In relation to the applicability of the legal regime of article 241 bis LSC to the liability action for debts provided for in article 105.5 LSRL (currently 367 LSC), this Chamber shows an unfavorable criterion, since the new legal precept literally limits its application to individual and social actions and is systematically located outside the scope of article 367 LSC. It is true that previous case law advocated the uniform application of Article 949 of the Commercial Code to all cases of director liability, but this was based on the non-existence of a specific rule for each of the director liability actions envisaged, which is not the case today.
Be that as it may, the statute of limitations exception cannot be accepted under the rules of article 949 of the Code of Commerce, because, as we have indicated, the statute of limitations period provided for in said precept would not have started to run”.