Manager debt liability: when is your personal assets threatened?

Since January 2025, the removal of the quasi-immunity of directors has shaken up the Belgian legal landscape and increased the risks of personal accusation of company directors. Are you a manager, administrator or de facto director, and you are wondering in what circumstances your personal assets could be used for the debts of your company? Maître Innocent TWAGIRAMUNGU, an experienced lawyer in Brussels since 2005, regularly supports managers faced with these complex issues and helps you understand the existing protection mechanisms.

What to remember

• The legal liability ceilings (€125,000 to €12 million) do not apply in the event of serious or usual minor faults or non-payment of social security contributions, VAT and professional withholding tax – your liability then becomes unlimited
• The declaration of exemption from seizure only protects your main residence and only against professional debts arising after its transcription at the mortgage office (no retroactive effect or on your other real estate)
• The directors of non-profit organizations are now subject to the same liability rules as commercial companies (action to cover liabilities, social debts) with the exclusive jurisdiction of the insolvency court.
• Since 2025, victims have been able to choose between contractual and extra-contractual action (the most favorable regime) while retaining your contractual means of defense.

The limited liability of managers: a fundamental but fragile principle

The principle oflimited liabilityconstitutes the cornerstone of Belgian company law. In theory, when you manage a company with legal personality such as an SRL, your personal assets remain separate from those of the company. The debts contracted by the company only involve its own assets, not yours.

Since the2025 reformHowever, this principle has significant limits. The new Book 6 of the Civil Code now allows third parties to directly engage your extra-contractual liability, putting an end to decades of almost absolute protection. This development is accompanied by strict supervision of liability amounts depending on the size of your company. In addition, victims can now choose the most favorable regime between contractual and extra-contractual action, while letting you retain your contractual defenses even in the event of extra-contractual action.

THEliability limitsvary considerably: 125,000 euros for small companies with a balance sheet of less than 175,000 euros and a turnover of less than 350,000 euros, up to 12 million euros for large companies exceeding 43 million euros of balance sheet or 50 million of turnover. These amounts may seem protective, but many exceptions exist. Indeed, the capping is excluded in the event of habitual slight faults, serious faults, fraudulent intentions, or non-payment of social security contributions, VAT and professional withholding tax, making your liability unlimited in these cases.

Please note:The notion of manager is not limited to formally designated agents. Article XX.225 extends liability to de facto managers, that is to say any person who has actually held the power to manage the company, even without a formal mandate. This notion covers people who have exercised a decisive influence on management, incurring their responsibility in the same way as legal directors.

Cases where the manager’s liability becomes personal and unlimited

Responsibility of managing tax and social debts: pitfalls to avoid

The debts ofVAT and withholding taxconstitute the first major risk for your personal assets. The tax administration has a formidable weapon: the presumption of fault. Concretely, if your company has not paid at least two quarterly debts or three monthly debts during a period of one year, you are presumed to be at fault according to articles 93undecies C of the VAT Code and 442quater CIR 1992.

Thispresumption of tax misconductreverses the burden of proof. It is no longer up to the administration to prove your fault, but up to you to demonstrate your lack of responsibility. The Bruges court of first instance confirmed in February 2018 the joint conviction of directors on this basis, illustrating the rigor of the courts.

THENSSO debtsfollow a different but equally dangerous logic. Article 226 of the Code of Economic Law provides for your joint and several liability if you have been a manager of at least two companies that have gone bankrupt or been liquidated during the previous five years with unpaid social security contributions. This provision particularly targets repeat offender managers.

Concrete example:A manager of a Brussels construction company saw his personal assets seized in 2023 for NSSO liabilities of 180,000 euros. Having previously managed a transport company put into liquidation with 45,000 euros of social debts three years previously, he fell within the scope of article 226. Despite his arguments invoking the COVID-19 crisis, the court upheld his joint and several liability, confirming that only completely exceptional circumstances can justify the repeated non-payment of social security contributions.

Management errors involving your personal liability

Aserious management errormay engage your liability well beyond the legal limits. Article XX.225 of the Code of Economic Law allows the trustee to bring an action to cover liabilities if your fault contributed to the bankruptcy. For example, continuing to contract debts even though you knew the company was insolvent constitutes serious misconduct.

L’action to fill liabilitiescan make you personally responsible for all or part of the social debts. The judge has broad discretion to set the extent of your sentence, which can go up to the entirety of the company’s liabilities. This action remains open for five years from the commission of the fault. It is crucial to note that the period starts from the commission of the fault and that the right to action ends definitively upon the closure of the bankruptcy, even if the five-year period has not expired.

Therecontinuation of loss-making activityrepresents a specific case provided for in article XX.227. If you knew or should have known that there clearly was no reasonable prospect of recovery and you failed to act as an ordinarily prudent and diligent manager, you may be held personally liable. This notion is assessed on a case-by-case basis depending on economic circumstances. Furthermore, managers must ensure compliance with specific compliance obligations, in particular anti-money laundering obligations according to article 505 of the financial supervision law, as well as GDPR compliance, under penalty of incurring criminal, administrative and civil liability.

Advice :The directors of non-profit organizations are not spared from these provisions. Since the reform of the Code of Economic Law, the rules relating to action to cover liabilities, liability for social debts and unreasonable pursuit of activity apply in full to directors of non-profit organizations. The insolvency court has exclusive jurisdiction to hear these disputes, thus unifying the liability regime between commercial companies and non-profit organizations.

Protection of personal assets and limitation of risks

Asset protection strategies for managers

Theredeclaration of exemption from seizureof your main residence constitutes effective protection against professional creditors. Established by notarial deed and transcribed at the mortgage office, it protects your family home from prosecution linked to your professional activities. Please note, however: this protection only applies to debts arising after transcription and is strictly limited to your main residence, with no effect on your other real estate. In the event of mixed use of your residence (professional and private), it is necessary to establish a descriptive statement of division by notarial deed if the professional part represents 30% or more of the total surface area to optimize property protection.

THEchoice of legal formdirectly influences your exposure to risk. An SRL offers better protection than a simple company without separate legal personality. Conversely, general partnerships expose your personal assets in an unlimited and joint manner. For an in-depth analysis of the different corporate forms and their impact on your liability, consult thecorporate law services of the firm.

• Limited liability company (SRL): maximum protection of personal assets
• Simple society: no protection, confusion of assets
• General partnership: joint and unlimited liability of partners
• ASBL: application of the same liability rules as to commercial companies since the reform

L’directors’ liability insurance(D&O) becomes essential in the current context. It covers your defense costs and possible damages, with ceilings of up to 12 million euros depending on your activity. Coverage generally extends to unintentional management errors such as forgetting registered mail, late filing of annual accounts, or unintentional environmental violations. Check particularly for exclusions, as some policies exclude coverage in the event of bankruptcy or limit protection for certain types of misconduct.

Organization and delegation to limit your manager debt liability

Theredelegation of powersallows certain responsibilities to be transferred to competent employees. To be valid, it must respect strict conditions: specific areas of expertise, attribution to the delegatee of the authority and necessary means, technical and legal competence of the delegatee. In large companies, case law even considers delegation as a duty of care. However, certain essential tasks remain non-delegable, notably strategic decisions, the definition of financial policy and requests for environmental permits. The delegatee must also benefit from complete independence with no obligation to refer matters before making a decision.

Theresystematic documentationof your decisions is your best defense. Prepare detailed minutes for each important decision, keep written exchanges justifying your choices, and ensure that general meetings and boards of directors are properly formalized. These documents prove your good management in the event of a challenge.

In case ofjoint responsibility, protect yourself by denouncing in writing the errors committed by other administrators. This denunciation, addressed to all members of the administrative body, relieves you of joint and several liability for faults that you have not committed personally.

Please note:Delegation of authority requires careful consideration of organizational structure. A manager of a Brussels technology SME recently avoided a personal fine of 250,000 euros by demonstrating that he had correctly delegated environmental management to a qualified manager, with sufficient budget and authority. The court recognized that the manager had acted with due diligence by putting in place this delegation formalized in writing and accompanied by regular training.

Managing financial difficulties and claims

Therealarm bell procedureprovided for in article 5:153 of the CSA imposes specific obligations on you. As soon as the net assets risk becoming negative or the company cannot honor its debts, you must convene the general meeting within two months. Failure to comply with this procedure engages your personal liability according to the case law of the Brussels Court of Appeal.

Forrebut the presumption of tax misconduct, several options are available to you. Request a judicial reorganization procedure, request bankruptcy or judicial dissolution if the situation requires it, or demonstrate that the difficulties result from exceptional circumstances beyond your management. Maintaining rigorous accounting with quarterly closings facilitates this demonstration.

• Limitation period: 5 years from the alleged facts for all liability actions
• Action to recover liabilities: exclusive jurisdiction of the trustee, end of right to action upon closure of bankruptcy
• Tax and social responsibility: specific procedures with possibility of contestation before the competent courts
• Protection by D&O insurance: immediate activation upon receipt of a complaint

Faced with apersonal accusation procedure, react quickly. Create a defense file with all the documents justifying your management, immediately apply for your directors’ liability insurance, and seek the assistance of a lawyer from the start of the procedure to preserve your rights.

Thereresponsibility of managersfor their company’s debts constitutes a major issue in the current economic and legal context. Between the new rules of extra-contractual liability, tax presumptions and actions to cover liabilities, the risks are increasing for your personal assets. Maître Innocent TWAGIRAMUNGU, with his experience since 2005, supports business leaders in Brussels in preventing these risks and defending their interests. His firm offers comprehensive expertise in corporate law, compliance and litigation, with a human and responsive approach adapted to the challenges of each situation. If you are a manager in the Brussels region and wish to secure your personal situation against the risks linked to your functions, do not hesitate to seek their advice to put in place protections adapted to your situation.