The Extent of the Liability of the Company's Board Members of Directors for the Insufficient Assets to pay off its Debts: A comparative study in Jordanian and French law

Abstract

Abstract

This study sheds light on the extent to which the director and members of the board of directors maintain the protection of the limited liability shield when liquidation shows a deficiency in its assets.

The study follows a comparative analytical approach by comparing the Jordanian and French legislations legislatively, jurisprudentially, and judicially to clarify the concept of the limited liability shield and the claim of liability for insufficient assets. It also follows a historical approach in some respects.

The study notes several conclusions, most notably that the Jordanian legislator, unlike its French counterpart, did not stipulate the liability of the actual director or the liability of the director and members of the previous board of directors for the lack of assets.

The study also has several recommendations, most notably the necessity of adopting the exemption of the director and members of the Board of Directors from liability in the event of negligence and simple errors and the necessity of stipulating the liability of the actual director, the former director, and the members of the Board of Directors with regard to the disability proven before the date in which they left the company.

The study concludes that if the director's liability for insufficient assets is proven, the liability shield is not always inevitably excluded. Rather, it may remain in place and may be partially excluded due to the court's wide discretionary power in determining liability and the amount of compensation, which constitutes a departure from the rules of civil liability.