As managing director, you bear enormous responsibility in a crisis – not only for the company, but also personally. Mistakes or omissions in this phase can lead not only to civil liability but also to criminal consequences. The good news: with the right knowledge and professional advice, you can minimize these risks.
The most common liability risks for managing directors
In a crisis, there are clear legal regulations; failure to comply with them can quickly lead to personal liability. The biggest risks include:
1. Delayed filing for insolvency
One of the most serious liability pitfalls is delayed filing for insolvency. If the company is illiquid or over-indebted, there is a duty to file for insolvency without delay. In Germany, this must be done within a maximum of three weeks after the onset of insolvency.
Risk:
- Civil liability for the damage caused to creditors.
- Criminal consequences, such as fines or imprisonment of up to three years.
Solution:
- Regular review of the financial situation and seeking expert advice as soon as doubts arise regarding solvency.
2. Prohibited payments after the onset of insolvency
After the onset of insolvency, no further payments may be made that would reduce the insolvency estate. Exceptions are payments that are strictly necessary for the continued operation of the business.
Risk:
- Recovery of these payments by the insolvency administrator.
- Personal liability for all unauthorized expenses.
Solution:
- Complete documentation and coordination of payments with legal advice.
3. Bankruptcy offenses and insolvency crimes
Certain acts during a corporate crisis are considered bankruptcy offenses or criminal insolvency acts, for example:
- Hiding or concealing assets.
- Destroying or falsifying accounting documents.
- Preference given to certain creditors.
Risk:
- Criminal prosecution with potential prison sentences of up to five years.
- Long-term economic and professional consequences.
Solution:
- Transparent and complete bookkeeping as well as cooperation with the insolvency administrator.
4. Liability for taxes and social contributions
During the crisis, the managing director will also be held personally liable for unpaid taxes and social security contributions. This applies in particular to:
- Payroll tax withheld from employees' salaries but not remitted to the tax authorities.
- Social security contributions that were not paid.
Risk:
- Personal liability that does not cease even through a subsequent insolvency.
- Criminal consequences for tax evasion or withholding of social security contributions.
Solution:
- Prioritizing tax and duty payments during the crisis, wherever possible.
- Regular communication with tax advisors and financial authorities.
Criminal consequences – when caution becomes a duty
In addition to civil liability risks, managing directors face significant criminal consequences in a crisis. Particularly critical are:
- Breach of trust (§ 266 StGB): Use of company funds for private purposes or improper spending.
- Tax offenses (§§ 370, 378 AO): Failure to pay taxes or providing false information to the tax office.
- Intentional insolvency offenses (§ 283 StGB): Such as concealing assets or providing incorrect information in insolvency proceedings.
Negligence or ignorance does not protect against punishment. It is therefore crucial to be fully aware of your own duties as managing director and to seek support in good time.
How to protect yourself from liability pitfalls
- Check your financial situation regularly:
Use key figures such as liquidity planning to identify impending illiquidity at an early stage. - Document all decisions:
Complete documentation protects you from the accusation of having made unlawful decisions. - Get legal and tax advice:
Experts can ensure that all measures are legally sound and minimize personal risks. - File for insolvency in time:
If insolvency is inevitable, act immediately. This is the only way to avoid personal consequences.
FAQ
When does delayed filing for insolvency occur?
Delayed filing for insolvency occurs if the insolvency petition is not filed within three weeks after the onset of insolvency.
Which payments are permitted after the onset of insolvency?
Only payments that are essential for the continued operation of the business, such as salaries or operating costs.
How can I protect myself from personal liability?
Regular liquidity checks, timely insolvency filings, and compliance with legal requirements minimize personal liability risks.
What are bankruptcy offenses?
Bankruptcy offenses are punishable acts such as concealing assets, destroying accounting records or favoring certain creditors.
Who is liable for unpaid taxes and social security contributions?
The Managing Director is personally liable for payroll taxes and social security contributions that were not paid in a timely manner.
Conclusion: Take responsibility and act
As managing director, you are under particular scrutiny in a crisis. But instead of letting worries and fears paralyze you, you can take action: secure the support you need to minimize risks and regain control. A crisis is never easy – but with the right knowledge and clear measures, you can emerge from it stronger.
Contact us now for a non-binding initial consultation. Together, we will protect your interests and open up prospects for a successful future.
