On the Nature and Forms of Directors' Liability to Third Parties: Centered around Article 191 of the New Company Law

DOI: https://doi.org/10.62517/jel.202514502

Author(s)

Shuyi Li

Affiliation(s)

Faculty of law, China Jiliang University, Hangzhou, Zhejiang, China

Abstract

The newly revised Article 191 of the Company Law establishes a liability system for directors towards third parties, but there is still controversy over the nature and form of liability. From the perspective of regulatory purposes, this system is designed to prevent directors from abusing their power and acting recklessly, which could harm the interests of the company and its creditors. In legal terms, the liability of directors to third parties is a moderate expansion of the fiduciary duty theory and the legal entity theory based on the concept of equity in specific contexts. Therefore, in terms of liability composition, the liability of directors to third parties should be stricter in subjective fault, causality, and other aspects compared to general tort liability. Given this, it should be classified as special tort liability rather than general tort liability. In the process of institutional construction, in order to achieve the value choice of mainly compensating for the losses of third parties and supplemented by reasonable punishment, the form of liability should be designed with a gradient of joint liability and supplementary liability according to the different circumstances of the damage, and the scope of liability should be reasonably limited according to the situation.

Keywords

Directors' Liability to Third Parties; Special Tort Liability; Joint Responsibility; Supplementary Liability

References

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