The Grounds for the Director’s Liability for Damage Caused to the Business Entity

Director’s liability for damage caused to the business entity is the most important mechanism for protecting interests of entity and its participants. This fact explains the importance of analyzing the legal regulation, of identifying imperfections, impeding the effective functioning of the institute. The main difficulty lies in the fact that in this area it is problematic to establish objective grounds for the director’s liability, since you have to deal with such concepts as wrongfulness and guilt, good faith and reasonableness, which often mix with each other. Ambiguous from the point of view of the balance between entity and director are the issues of distribution of the burden of proof, the limits of the director’s liability, including for the actions of third parties. Object of research is relations connected with the involvement of the director of the company to civil liability for damages to the company. The subject of the research is the norms of the legislation of the Russian Federation governing the liability of the director for damage caused to the entity; established judicial practice. Purposes of the research are: 1) highlighting the grounds of bringing the director to account for losses incurred to the company, developing criteria for the unlawfulness of these actions; 2) identification of problems in the regulation the institute of the director’s liability and making proposals for solving the existing problems. For achieving these purposes, the following tasks were placed: 1) to study the doctrine regarding the grounds for director’s liability for damage caused to the entity; 2) to study the nature of the duties of a director to act in the entity interest in a good faith and reasonableness, to the distinction between the concepts of wrongfulness and guilt; 3) to analyze current practice of applying the provisions of the legislation; 4) to form own positions about the regulatory mechanism of the institution under consideration.