THE LEGAL SCOPES OF PERSONAL LIABILITY OF THE MANAGEMENT BODY OF A LIMITED LIABILITY COMPANY TOWARDS CREDITORS

Abstract

The issue of a director’s personal liability towards creditors remains a significant challenge for both Georgian judicial practice and legal scholarship. This paper examines the liability of directors of limited liability companies in relation to third-party claims under Georgian legislation. With the entry into force of the new Law of Georgia “On Entrepreneurs” in 2022, the question of directors’ personal liability has become even more topical. The paper focuses on the director’s external liability towards third parties, namely creditors. It identifies the legal basis for imposing such personal liability, in particular the general tort provision set out in Article 992 of the Civil Code of Georgia, and analyzes the prerequisites for establishing tortious liability. Given the absence of established case-law following the adoption of the new Law of Georgia “On Entrepreneurs,” the recommendations offered in this paper are intended to contribute to the proper development of judicial practice. For this purpose, the paper conducts a comparative legal analysis of both continental European and Anglo-American approaches and evaluates the contemporary relevance of Georgian judicial practice developed prior to the new law.