The absence of remuneration for the manager has no effect on the extent of his or her liability in respect of the action to make good the shortfall in assets

Published on LinkedIn, February 2021

Managers are often convinced that not receiving remuneration (by not paying themselves a salary or working on a voluntary basis) means that they are not personally liable, particularly in terms of financial liability for their duties, on the grounds that they have not received any personal benefit.

However, this mistaken belief is regularly refuted by the Court of Cassation. In fact, according to the judges, unpaid de jure directors have the same obligations, and therefore the same responsibilities, as paid directors.

This refusal by the judges to absolve of any liability or, at the very least, to consider a ‘reduced’ liability exposes the unpaid director to financial liability for breach of duties without compensation in the event of an action for liability for insufficient assets against them in the context of judicial liquidation.

Directors must therefore be aware of this risk before accepting an unpaid position.