Introduction
Recent rulings, such as Supreme Court Judgment 114/2026 of 30 January and Madrid High Court Judgment 90/2026 of 10 March, clarify the scope of liability of the natural person representing a legal person acting as a director. Both rulings are based on the same provision: Article 236.5 of the Companies Act (hereinafter LSC), which equates the individual’s position in terms of duties and liability with that of the managing entity. This equivalence makes it possible to hold the individual jointly and severally liable without the need to attribute to them the status of de facto director.
In commercial practice, it is common for a company to appoint another legal entity as its managing body, which will carry out its duties through a natural person acting as a representative. This arrangement may be driven by management or corporate structure considerations, but it can also create a mistaken perception of protection for personal assets. Notwithstanding the above, the interposition of a managing company does not exclude the liability of the natural person appointed to carry out its functions on a permanent basis; it is therefore worth asking: how does this equivalence operate and how far does it extend?
The regulatory framework and the status of the representative:
The starting point for this regime is Article 212 bis.1 of the Companies Act (LSC), which requires the legal person appointed as director to designate a single natural person to carry out the duties inherent to the post on a permanent basis. Article 236(5) of the LSC applies to this role, providing:
“The natural person appointed to carry out on a permanent basis the duties inherent in the office of director of a legal person must meet the legal requirements established for directors, shall be subject to the same duties and shall be jointly and severally liable with the legal person acting as director”
The provision subjects the representative to the requirements and duties of a director and expressly establishes their joint and several liability. The relevant condition is that of the representative appointed to carry out the duties of the office on a permanent basis. Consequently, the application of this provision requires the identification of that person, the period during which they acted, and the facts giving rise to liability.
Where the conditions for the action brought are met, joint and several liability allows the full amount of the obligation covered by that liability to be claimed from the managing body, the representative or both, in accordance with Article 1144 of the Civil Code. The aggrieved party does not have to first exhaust the assets of the legal person in order to bring a claim against its representative. However, appointment alone does not make the representative a guarantor of any obligation of the managed company.
The doctrine of the Supreme Court and its implications for insolvency proceedings:
In the recent Supreme Court Judgment 114/2026 of 30 January (appeal 7988/2023), the regime of legal equivalence of the representative of a legal person acting as administrator is directly addressed, examining the role of such a representative and the possibility of declaring the representative of the managing legal person to be an affected party in the context of a finding of culpability in the insolvency proceedings. In those proceedings, the appellant argued that Article 455(2)(1) of the Consolidated Text of the Insolvency Act (TRLC) did not expressly include such representatives amongst the persons who might be affected.
Our High Court rejects an isolated interpretation of that provision. Articles 455(2)(1) TRLC, 212 bis(1) LSC and 236(5) LSC form part of a body of legislation designed to protect third parties against the unlawful acts of company directors. Action taken through a legal person must be viewed in relation to the involvement of the natural person carrying out its functions.
The Chamber recalls, citing Supreme Court Judgment 104/2018 of 1 March, that a representative does not acquire the status of de facto director merely by performing the functions inherent in a representation expressly provided for by law. Their subjection to the liability regime derives from the legal equivalence established in Article 236(5) of the LSC. In the Court’s words, these natural persons:
“shall be treated, in terms of their functions, requirements, duties and responsibilities, as equivalent to the legal person acting as director whom they represent”
It follows that the director and its representative are jointly and severally liable to the company through a corporate action, and to third parties through an individual action, for the company’s debts in the circumstances set out in Article 367 of the LSC and, where applicable, for their involvement in causing or aggravating the insolvency. In the context of insolvency proceedings, both may be subject to a finding of culpability.
The judgment also introduces a necessary clarification: this equivalence does not entail indiscriminately transferring all the consequences of the finding of culpability. With regard to the disqualification under Article 455(2)(2) of the TRLC, the Chamber points out that this may only be imposed on the representative who is a natural person. With regard to the coverage of the insolvency deficit under Article 456 of the TRLC, the Court upholds, in the case under consideration, the joint and several liability of the administrator and the representative, linked to the latter’s conduct which led to the finding of culpability.
The application by the Madrid Provincial Court to company debts:
Similarly, the recent Interim Appeal Judgment (SAP) of Madrid, Section 28, No. 90/2026, of 10 March, applies this doctrine to a claim for liability in respect of company debts. The dispute concerned a debt arising in 2021 and a claim for 3,031.56 euros, plus expenses and costs, brought against the managing company and its representative, who is a natural person.
At first instance, the claim under Article 367 of the Companies Act (LSC) against the legal person acting as director had been upheld, whilst the representative was acquitted. The court held that the representative could only be held liable if his status as a de facto director were proven, a circumstance which it did not consider to have been established. The individual liability claim had also been dismissed in respect of both defendants.
The Court of Appeal corrects that reasoning. In its third legal ground, it invokes Article 236(5) of the LSC and Supreme Court Judgment 114/2026 to explain that the representative is subject to the liability regime by virtue of his legal position. Consequently, it upholds the appeal and declares him jointly and severally liable for the debts which the management company had been ordered to pay. The outcome demonstrates the practical utility of this equivalence: the lack of evidence of de facto management does not prevent the application of the specific regime governing the representative.
Legal assessment and practical scope:
The rulings discussed here allow the various forms of corporate liability to be extended to the representative, whilst respecting the requirements of each. The corporate action protects the assets of the managed company; the individual action addresses the direct damage caused to the shareholder or a third party. The equivalence provided for in Article 236(5) of the Companies Act does not dispense with the need to prove the elements required in these actions for damages, such as unlawful conduct, damage and causation, nor does it dispense with the need to consider intent or negligence and the applicable legal presumptions.
Furthermore, liability for debts under Article 367 of the Companies Act requires proof of the existence of a ground for dissolution, a breach of statutory duties and the debt falling within the temporal scope of the provision, whilst also taking account of its exceptions.
In insolvency proceedings, any potential order to cover the deficit requires consideration of the conditions set out in Article 456 of the TRLC and the extent to which the conduct leading to a finding of culpability contributed to the creation or aggravation of the insolvency. However, joint and several liability is linked to the scope of the liability declared under Article 263.5 of the LSC.
For all the above reasons, in a professional context, it is necessary to verify the appointment of the representative, the chronology of events and the grounds for bringing a claim. For anyone who accepts this role, it entails assuming the duties inherent in the management of the company and acting in situations that may compromise the company. Permanent representation entails personal financial exposure, which must be assessed from the moment the appointment is accepted.
At the Commercial Law Department of Belzuz Abogados, S.L.P., Madrid, we consider it essential to review each case taking into account the role performed, the timing of the events and the basis of liability invoked. The choice of a legal entity as a director must be accompanied by a precise assessment of the duties and risks assumed by its representative, as well as the potential for claims that this status affords the company, its shareholders and its creditors.