Legal Q&A · Company & shareholders

Is an s.r.o. managing director personally liable for its debts?

Law as at 21 July 2026

Answered by , Czech and Slovak attorney, admitted to the Slovak and Czech Bars (SAK 300422 · ČAK 19654).

Short answer

The company is responsible for debts. A managing director is liable to it for damage caused by breaching professional care, and no agreement can exclude that liability in advance. Insolvency creates the toughest exposure: a bankruptcy petition must be filed within 30 days, otherwise the director risks a €12,500 statutory contractual penalty, liability to creditors for their unsatisfied claims and disqualification from office.

Does a director guarantee company debts?

A managing director does not automatically guarantee company obligations by law. The risk is different. Under Section 135a of the Commercial Code, directors must act with professional care and in the interests of the company and all shareholders: obtain available information when deciding, preserve confidentiality and avoid favouring personal interests or only some shareholders.

A director who breaches these duties is liable to the company for the resulting damage. Multiple directors are jointly and severally liable. The law expressly includes, for example, unlawful payments to shareholders.

Can liability be excluded in advance?

Agreements excluding or limiting liability are prohibited. Neither the memorandum nor articles may limit it (Section 135a(4)). A director avoids liability by proving professional care and good faith that they acted in the company’s interests. Nor are they liable for implementing a general meeting resolution, unless it conflicts with legislation or concerns the duty to petition for bankruptcy (Section 135a(3)).

In practice, make informed decisions and document them. Supporting materials, calculations and expert opinions relied upon are decisive evidence in a dispute.

When can a creditor sue the director directly?

A company creditor unable to satisfy its claim from company assets may enforce the company’s damages claims against the director in its own name (Section 135a(5)). Even the company’s waiver does not prevent this. In bankruptcy, the administrator enforces the claims. The director’s risk therefore grows precisely when the company encounters financial trouble.

The toughest liability: a late bankruptcy petition

If the company is insolvent, the director must petition for bankruptcy within 30 days of learning, or being able to learn with professional care, of insolvency (Section 11(2) of Act No. 7/2005 Coll. on Bankruptcy and Restructuring). Breach has three separate, substantial consequences:

  1. A €12,500 statutory contractual penalty. The law deems the company and director to have agreed a penalty equal to half the minimum share capital of an ordinary joint-stock company, €25,000 under Section 162(3) of the Commercial Code, producing €12,500. It cannot be excluded or limited by agreement, waived by the company or set off. Damages exceeding the penalty remain recoverable.
  2. Liability for damage to creditors under Section 11a. The director answers for harm caused by failing to file in time. Statutory presumptions significantly assist creditors: late filing is presumed, among other cases, where bankruptcy was not declared or was cancelled for insufficient assets, or enforcement ended for that reason. Damage is presumed equal to the unsatisfied claim. These claims become time-barred no earlier than one year after those events. The director avoids liability only by proving the statutory exonerating circumstances, particularly professional care.
  3. Disqualification. A final judgment ordering compensation for late filing also disqualifies the director from serving on corporate bodies for the specified period.

Letting a company decay and starting another is therefore the most expensive route for its statutory representative. Section 11a’s presumptions target precisely that conduct. Financial difficulties require active, timely action.

How to manage the risk sensibly

Start with a sound director’s service agreement covering pay, responsibilities and approval rules, and obtain a second legal opinion for major decisions. Our external legal department provides this for companies without in-house counsel. If a dispute threatens with the company or among shareholders, we also handle shareholder disputes.

This answer provides general information on the law as at 21 July 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.

More legal questions

All questions and answers
  1. Can several people own a single business share? Yes. A single business share may belong to several people, such as multiple heirs or co-investors. They may exercise its rights only through a common representative and are jointly and severally obliged to pay the capital contribution. The common representative and details of all co-owners are entered in the Commercial Register.
  2. As a shareholder, am I entitled to payment for work for the company without a contract? Shareholder status alone does not create a right to remuneration for work. If, however, a shareholder actually manages the company's affairs, Section 66(6) of the Commercial Code may make the mandate regime, including customary remuneration, applicable as appropriate even without a separate remuneration agreement. The nature of the activity and the agreed arrangements are decisive; written remuneration terms help prevent disputes.
  3. The company is inactive and may be removed by the court. Am I exposed as a shareholder? A court may dissolve a company on the statutory grounds under Section 68b of the Commercial Code, for example if its corporate bodies have not been appointed for more than three months or it is more than six months late in filing financial statements under Section 40(2). Failure to convene a general meeting is not in itself a separate ground for dissolution. Under Section 106, a shareholder guarantees obligations only up to the unpaid contribution shown in the register; any liability as a managing director or under personal security must be assessed separately.
  4. Can I apply to expel another shareholder from an s.r.o.? You cannot apply personally as a shareholder. The company seeks court expulsion of a shareholder who seriously breaches their duties. A managing director acts for it, but shareholders whose contributions represent at least half the share capital must consent to the application. The offending shareholder must first have been called on to comply and warned in writing of possible expulsion. An expelled shareholder is entitled to a settlement share.

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Mgr. Patrik Tulinský, LL.M. Czech and Slovak attorney · SAK 300422 · ČAK 19654

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