SARL : the plurality of managers […]

Cass, Com, January 25, 2023, n°21-15.772

In its decision of January 25, 2023, the Court of Cassation recognizes the possibility of engaging the individual liability of a co-manager of a limited liability company for a management error of which he is the author.

1. The legal framework

Under the terms of the first two paragraphs of article L223-22 of the Commercial Code, the managers are liable, individually or jointly and severally, as the case may be, to the company or to third parties, either for infringements of the legislative or regulatory provisions applicable to limited liability companies, or for breaches of the articles of association, or for faults committed in their management. If several managers have cooperated in the same facts, the court shall determine the contributory share of each in the compensation of the damage.

2. The facts

In this case, one of the co-managers of a limited liability company made the company bear the costs of electrical consumption related to another company of which he was the owner.

The LLC sued him for personal liability for mismanagement.

The Noumea Court of Appeal rejected his request on the grounds that the action must be directed against all the co-managers of the company.

The limited liability company appealed to the Supreme Court on the grounds that only one of the managers of a company can be held liable, individually, when he alone is at the origin of the wrongdoing.

3. The opinion of the Court of Cassation

The Court of Cassation overturned the appeal decision on the grounds that the plurality of managers does not prevent them from being held individually liable.

Thus, the collective nature of the management body does not preclude an action for liability against the co-manager for acts or omissions of which he is the author. Indeed, article L223-18 paragraph 7 of the Commercial Code provides that in case of co-management, each manager holds separately the powers of this article. It follows that each of the managers may be individually liable for a management error that he or she has committed.

Furthermore, it seems relevant to question the consequences of this action on the other co-manager. Indeed, the Court has recognized on numerous occasions that a failure by one of the co-managers to supervise the activity of another constitutes a fault. The co-manager’s fault may therefore be characterized in the event of negligence resulting from a manifest failure to supervise the co-manager’s activities.