What are we talking about? Subsidiary liability of the founder occurs if the company's debt to creditors, employees, tax authorities is discovered. It can be brought to this not only within the framework of bankruptcy, but also due to blackmail.
What to do? To protect their interests, the founder will have to prove their innocence in every possible way: with documents, witness statements. It is possible to avoid sanctions, but it is better not to risk it at all, conducting their activities transparently for everyone.
The article explains:
What does subsidiary viber database liability mean?
Types of subsidiary liability
Who can be held subsidiarily liable?
Differences between subsidiary liability of the founder and joint and several liability
When does subsidiary liability of founders and directors arise?
Situations in which subsidiary liability of the founder is inevitable
The procedure for bringing the founder to subsidiary liability for the debts of an LLC
Does subsidiary liability always occur within the framework of bankruptcy?
Subsidiary liability as a tool for blackmailing the founder
What needs to be done to bring the founder to subsidiary liability
Consequences of being held subsidiarily liable
How a founder can protect himself from subsidiary liability
How to avoid subsidiary liability
Limitation periods for subsidiary liability
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What does subsidiary liability mean?
Subsidiary liability of a founder, director or other person is a legal obligation under which such entities may be held liable for a debt that is not available for repayment by the principal debtor they control.
For example, the head of an enterprise may be held liable for overdue payments. At the same time, an ordinary manager cannot be held liable in this way.
Let's take a hypothetical situation in which company "X" is declared bankrupt. Bankruptcy proceedings are initiated against such a company, followed by the sale of property to pay off debts to creditors. In the event that the money in the organization's account and the proceeds from the sale of its assets are insufficient to cover the liabilities, they can be collected from the founder, manager, chief accountant, etc.
Participants in subsidiary liability
In situations involving subsidiary liability, there are three parties:
Creditors who do not receive a return on their invested funds or planned profits due to the fault of the debtor are the injured party.
The debtor is an organization that has not paid off its obligations to creditors and is in a state of bankruptcy.
Subsidiary debtors are persons who control the debtor company and who, through their actions or inactions, brought the organization to such a situation.
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In what cases does the legal phenomenon we are considering take place? Subsidiary liability of the founder, director, etc. arises in the event of bankruptcy of the enterprise. In addition, this may occur if the persons controlling the organization abandoned it along with the outstanding debt obligations. The procedure for applying subsidiary liability varies depending on the conditions of its occurrence.
Types of subsidiary liability
It is necessary to distinguish two types of subsidiary liability: statutory and contractual . In the first case, it arises on the basis of legislative norms. In turn, contractual subsidiary liability arises from obligations stipulated in the agreement (for example, in the agency agreement).
In a situation where the borrower fails to repay the loan, the bank may turn to the guarantor to recover the debt. This is part of the agreements concluded by the parties. At the same time, if the company faces financial difficulties and is unable to settle its debts to lenders, the latter have the right to demand compensation from the company's management. This form of liability is determined by law.