He drained the cash: the corporate liability claim
Last updated 2026-09-01 · Reviewed by Jaime Piñeira Pardo, registered with the ICAM bar, no. 138826
The short answer
The corporate liability action is brought before the Commercial Section of the Tribunal de Instancia (the first-instance court). Where the complaint is a breach of the duty of loyalty, a shareholder with five per cent sues directly, without going through the meeting. The action prescribes four years from the day it could have been brought, and what is recovered goes into the company's own funds.
You hold 8 % of a Spanish limited company. The director, who controls the rest with his family, has been charging the company a luxury car, trips, the refurbishment of his home and invoices from a consultancy that turns out to be his own, some 210,000 euros over three financial years. The shareholder current account shows a balance in his favour that nobody has repaid. You asked for explanations at the meeting and were told the accounts had been approved and the matter was closed.
The case, in five lines
- What is brought
- Corporate liability action under articles 238 and 239 LSC, so that the director compensates the harm caused to the company's assets and returns the unjust enrichment he obtained.
- Before which court
- The Commercial Section of the Tribunal de Instancia (the first-instance court), with a later appeal before the Audiencia Provincial (the provincial appeal court).
- Deadline
- Four years under article 241 bis LSC, counted from the day the action could have been brought. Each withdrawal of funds has its own starting point, so the oldest ones may already be out of time while the recent ones remain fully alive.
- Who can bring it
- The company, after a resolution of the general meeting. Also the shareholder or shareholders holding the percentage that allows a meeting to be requested, which article 168 LSC sets at five per cent of the capital, and who may sue directly where the basis is a breach of the duty of loyalty.
- Financial risk
- If the claim is dismissed you may be ordered to pay the other side's costs, having advanced the accounting expert evidence. If it succeeds in whole or in part, article 239.2 LSC obliges the company to reimburse your necessary expenses, within the limits of article 394 of the Ley de Enjuiciamiento Civil.
With five per cent you can sue without going to the meeting
The general rule in article 238 LSC is that the action is brought by the company after a resolution of the general meeting, a resolution that may be adopted at the request of any shareholder even if it is not on the agenda, and for which the articles cannot demand anything above the ordinary majority. In a company where the director controls the votes, that road leads nowhere.
That is why article 239.1 LSC opens a door for the minority. Shareholders holding the stake needed to request that a meeting be called may bring the action where the directors do not call the meeting requested for that purpose, where the company does not sue within one month of the resolution, or where the resolution went against demanding liability. Article 168 LSC sets that stake at five per cent of the capital.
The second paragraph of that same article 239.1 is what decides cases like yours: where the action is based on a breach of the duty of loyalty, those shareholders bring it directly, with no need to put the decision to the general meeting. Taking company money for personal spending is precisely that, and it saves you months of meetings called and votes lost.
The money awarded returns to the company, not to your pocket
This should be understood from the start, because it shapes the whole strategy. The corporate action defends the company's interest, so an award restores the company's assets. You benefit indirectly, in proportion to your stake, and above all because a company with its funds restored can pay dividends again and recovers its market value.
Article 227 LSC sets the content of the award. Directors must perform their office with the loyalty of a faithful representative, acting in good faith and in the best interest of the company, and breach of that duty entails not only the obligation to compensate the harm caused to the company's assets, but also the obligation to return the unjust enrichment obtained.
That double award matters greatly in practice. Even if the director argues that the car or the trips had some use for the business and disputes the loss, the return of unjust enrichment is measured by what he took. And if the claim succeeds in whole or in part, article 239.2 LSC obliges the company to reimburse the necessary expenses you incurred.
Approval by the meeting does not save the director
The answer you were given, that the accounts were approved and the matter is closed, is wrong. Article 238.4 LSC states plainly that approval of the annual accounts neither prevents the liability action from being brought nor amounts to a waiver of an action resolved upon or already under way. Approving accounts is not forgiving what those accounts conceal.
Article 236.2 LSC goes further: in no case does it release a director from liability that the harmful act or resolution was adopted, authorised or ratified by the general meeting. In other words, not even an express resolution of the majority blessing those withdrawals of funds protects the director against the corporate action.
There is one limit to watch. Article 238.2 LSC lets the meeting settle or waive the action at any time, but only if shareholders representing five per cent of the capital do not oppose it. That five per cent is your shield, and it must be used by having the opposition recorded in the minutes of the relevant meeting.
Whoever really runs the company answers too, title or not
It is common for the person signing at the Companies Register to be a relative or an employee while someone else takes the decisions. Article 236.3 LSC extends liability to the de facto director, and defines that widely: anyone who in actual practice performs the functions of a director without title, with a void or expired title, or under another title, and also anyone on whose instructions the directors act.
The same article closes two more exits. Its paragraph 4 applies the rules on duties and liability to whoever holds the company's most senior management powers, whatever the job title, where there is no permanent delegation to managing directors. Its paragraph 5 makes the individual designated by a corporate director jointly and severally liable together with that corporate director.
For liability to arise, article 236.1 LSC requires harm caused by acts or omissions contrary to the law or the articles, or by breach of the duties of office, with intent or negligence. And it adds a decisive rule: fault is presumed, unless the contrary is proved, where the act is contrary to the law or to the company's articles.
The four years run from when the action could be brought
Article 241 bis LSC provides that the liability action against directors, whether corporate or individual, prescribes after four years counted from the day it could have been brought. It is not a single period covering the director's whole history: each harmful act has its own moment from which the action was available.
In a case of continuous asset stripping that means working invoice by invoice and entry by entry. The oldest withdrawals may fall outside and those of recent years fully inside, and the claim must reflect that split rather than demand a round total which the director will attack in its entirety by pleading prescription.
The moment the action could be brought depends on when the conduct became knowable to the person able to sue, and that is proved with documents: the date accounts already showing the balance were approved, the minutes in which you asked for explanations, or the email refusing you the accounting detail you had requested.
How we run the case, step by step
- 1
We reconstruct the outflow from the accounts and entries
We work through the annual accounts, the general ledger, the shareholder current account and the bank statements to put a figure and a date on each withdrawal, separating those still within the four years of article 241 bis LSC.
- 2
We choose the route: meeting or direct claim for disloyalty
Where the complaint is a breach of the duty of loyalty, article 239.1 LSC allows a direct claim with five per cent. Where going through the meeting is preferable, the meeting is requested from the directors by notarial demand under article 168 LSC.
- 3
We set your position at the meeting and block any waiver
If a meeting is held, we place on the minutes the request to demand liability and the opposition to any waiver or settlement, because article 238.2 LSC blocks it where shareholders representing five per cent of the capital object.
- 4
We demand restitution and negotiate with the director
We send a demand setting out the amounts in detail and their basis in article 227 LSC. With the accounting evidence on the table, many directors prefer to repay and leave office rather than reach trial.
- 5
We bring the claim before the Commercial Section
The claim seeks compensation for the harm and the return of the unjust enrichment, rests on the accounting expert report and, where the director's assets are at risk, is accompanied by an application for interim measures.
- 6
We enforce the judgment and claim the necessary expenses
Once the award is obtained, what is restored is paid into the company and reimbursement of the necessary expenses provided for by article 239.2 LSC is claimed from it, within the limits of article 394 of the Ley de Enjuiciamiento Civil.
The evidence that decides the case
- The company's bank statements showing transfers and card payments unrelated to the business.
- The general ledger and the shareholder current account, with the balance in the director's favour that has never been repaid.
- Invoices from suppliers linked to the director and the register documents revealing who stands behind those companies.
- The minutes of the meeting in which you asked for explanations and the answer recorded in them.
- The notarial request to call a meeting under article 168 LSC and how the directors responded to it.
- An accounting expert report quantifying the harm to the company's assets and the enrichment the director obtained.
What closes the door
- Believing that approval of the accounts closes the matter. Article 238.4 LSC states that it neither prevents the action from being brought nor amounts to a waiver of one already resolved upon or under way.
- Losing months chasing a meeting resolution the majority will never pass, when the basis is a breach of the duty of loyalty and article 239.1 LSC allows a direct claim.
- Failing to object formally to a settlement or waiver at the meeting. Article 238.2 LSC blocks them only where shareholders representing five per cent of the capital object.
- Claiming one round total covering several years without separating each act. Article 241 bis LSC counts four years from when each action could have been brought, and the whole claim is put at risk.
- Suing only the person on the register when someone else took the decisions. Article 236.3 LSC also reaches the de facto director and whoever gives the instructions.
The law that applies
- Art. 227 LSC. Imposes on the director the duty of loyalty, acting as a faithful representative, in good faith and in the best interest of the company, and ties to its breach the obligation to compensate the harm caused to the company's assets and to return the unjust enrichment obtained. BOE-A-2010-10544
- Art. 236 LSC. Sets the conditions of liability, harm caused by acts or omissions contrary to the law or the articles or by breach of the duties of office with intent or negligence, presumes fault where the act breaches the law or the articles, denies any releasing effect to approval by the meeting, and extends liability to the de facto director. BOE-A-2010-10544
- Art. 238 LSC. Vests the action in the company after a meeting resolution, which any shareholder may request even off the agenda and which needs only the ordinary majority, allows settlement or waiver unless five per cent of the capital objects, orders the removal of the directors concerned, and denies that approval of the accounts bars the action. BOE-A-2010-10544
- Art. 239 LSC. Gives standing to the minority able to request a meeting to bring the action where no meeting is called, the company does not sue within a month, or the resolution went against demanding liability; allows a direct claim where the basis is breach of the duty of loyalty; and obliges the company to reimburse necessary expenses if the claim succeeds. BOE-A-2010-10544
- Art. 241 bis LSC. Subjects the liability action against directors, whether corporate or individual, to a four-year prescription period counted from the day on which it could have been brought. BOE-A-2010-10544
- Art. 168 LSC. Requires directors to call the general meeting when shareholders representing at least five per cent of the capital request it, stating the matters to be dealt with, and to hold it within the two months following the notarial demand, including the requested matters on the agenda. BOE-A-2010-10544
Each article checked against the consolidated text published in the BOE (the Spanish official gazette).
Frequently asked questions
Do I need a meeting resolution to sue the director?
Not always. Article 239.1 LSC lets a shareholder holding the percentage in article 168 LSC, five per cent of the capital, bring the corporate action directly where it is based on a breach of the duty of loyalty. For other bases you must have requested the meeting and wait for it not to be called, for the company not to sue within a month, or for the resolution to go against demanding liability.
If I win, are the 210,000 euros paid to me?
No. The corporate action restores the company's assets, so the compensation for harm and the return of unjust enrichment imposed by article 227 LSC are paid into the company's own funds. You benefit in proportion to your stake and recover the value of the company. In addition, article 239.2 LSC obliges the company to reimburse your necessary expenses if the claim succeeds in whole or in part.
We approved the accounts for those years. Have I lost the right?
No. Article 238.4 LSC provides that approval of the annual accounts neither prevents the liability action nor amounts to a waiver of an action resolved upon or already under way. And article 236.2 LSC adds that in no case does it release a director from liability that the harmful act was adopted, authorised or ratified by the general meeting. What does keep running is the four-year period.
The registered director is his brother, but he decides. Whom do I sue?
Both of them. Article 236.3 LSC extends liability to the de facto director, and treats as such both anyone who in actual practice performs the functions of the office without title, with a void or expired title or under another title, and anyone on whose instructions the directors act. It is proved with emails, signed contracts, banking authorities and the company's daily operations.
From when do the four years of prescription run?
Article 241 bis LSC counts them from the day the action could have been brought, not from the year end nor from the director's departure. That is why each withdrawal of funds is analysed separately: the oldest may be time barred while the recent ones remain alive, and the claim must reflect that split with dates and documents.
This guide explains how the action works in general. It does not replace the study of your own case: deadlines depend on when things happened and on what you have done since.