Responsibility of managers and administrators towards Society

Managers or administrators are responsible to society for damages caused to it
as a result of acts or omissions carried out by them in breach of their duties (legal or
contractual) to which they are subject, unless they prove that they acted without fault, as
results from article 72, paragraph 1 of the Commercial Companies Code (CSC). Therefore, under the terms of no.
2 of art. 71st, this responsibility is removed whenever managers or administrators prove to have
acted in informed terms, free from any personal interest and according to criteria of rationality
business

Thus, in accordance with paragraph 2 of art. 71 of the CSC, a business judgment rule is foreseen, a
rule according to which the decisions of administrators, within the discretion of the activity
of management of limited liability companies, are presumed correct, and it is up to whoever
wants to hold them responsible for the consequences of any non-compliance, prove that the
administrators in question have violated any of the duties to which they are legally or contractually (for
example, in the Company's Articles of Association) are obliged.

It is then worth asking: What is necessary to prove to activate the responsibility of
Quota companies or directors of public limited companies in this type of
non-compliance?

The business rationality that the letter of the law calls for materializes in decision-making
reasonable. But what is the criterion to define whether we are facing a reasonable decision? A decision will be
reasonable when the administrator has opted for a possible alternative, capable of serving the interests
of society. Conversely, whenever the decision that the administrator takes goes beyond the
corporate discretion, in such a way that it is not configured as rationally capable of
satisfaction of the Society's interest, there will necessarily be a breach of duties of care and
consequently responsibility of the administrator in light of art. 72.º, no. 1 of the CSC.

In other words, administrators immediately have an obligation to comply with the Law (including
the CSC, which provides for a wide range of administrative and even criminal offenses) and the Statutes
(including, carrying out acts that are included in the Object of activity defined by the partners). Any
administrator of a commercial company must assume the obligation to try not to waste the
social heritage (for example, acquiring a useless patent for the company or purchasing
worthless shareholdings). On the other hand, administrators must know how to guard against
disproportionate risk in relation to the Company's asset capacity, which translates into the circumstance of
The sustainability of society can never be jeopardized by a single poorly made decision,
(for example, investing 4/5 of the company's assets in the acquisition of high-risk shares).

Along these lines, Portuguese Law has understood that administrators have an obligation to
means and not necessarily results, your decision is not required to be a success, it is required
administrators must obtain reasonable information in the decision-making process and take
reasonable, sustained and appropriate decisions, avoiding decisions devoid of a
coherent explanation or plausible foundation.

This means that the Company that may wish to hold its managers and
administrators, must prove in a sufficient and unequivocal way that the decision in which the
responsibility is assessed, it was a decision devoid of business rationality, under the terms
previously exposed. *

* This article is for informational purposes only and does not preclude the need for
advice from a lawyer.