The Ohada Law has through its Uniform Act provided for various management liabilities which may be incurred by the management of a company that has become insolvent and has been put into administration or liquidation. In this context, the ‘management’ has to be understood as including not only persons who are officially directors or managers of the company whether their functions have been remunerated or not, but also persons who have had de facto management control within the company, and the permanent representatives of other companies on the board of directors. Management liabilities take the following forms;

Liability for the company’s debts (comblement du passif): When there is insufficient assets to meet the company’s liabilities, when bad management has contributed to this insufficiency, the court may decide, at the request of the administrator or liquidator or of its own motion, and within a maximum period of three years from the date upon which the final list of debts is established, that the company’s liabilities should be borne in whole or in part by one or more of the members of the management. In such circumstances, the court may also order the managers to sell their shares, with the proceeds of the sale being used in payment of the portion of the debts for which they have been held liable.

Extension of administration or liquidation to members of the management: In the event their company is put into administration or liquidation, the members of the management may be declared personally in administration or liquidation if they have exercised a personal commercial activity under cover of the company, have used the company’s credit or assets as if they were their own, or perused the company’s loss-making activity in their own personal interest when it was inevitable that this would lead to insolvency. The same persons may also be put into administration or liquidation if they have failed to discharge their liability for the company’s debts. When personal administration or liquidation proceedings are opened against members of the management, creditors have their claims automatically admitted in these proceedings if their claims have been admitted in the proceedings concerning the company itself.

Personal Bankruptcy (faillite Personnelle): Individual commercial operators, individuals who are members of the management of a company subject to administration or liquidation proceedings, and permanent representatives of companies sitting on the board of a company subject to such proceedings may be put into personal bankruptcy by the court at any time during the proceedings.

Criminal Bankruptcy (Banqueroute): The ohada law provides for two types of criminal bankruptcy; simple bankruptcy and fraudulent bankruptcy for particularly serious acts committed either by individual commercial operators or by shareholders in certain types of companies who are indefinitely and jointly and severally liable for their company’s debts. The management may be made subject to criminal bankruptcy even if they have also been made subject to the extension of administration or liquidation proceedings.

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