Improper administration

Improper administration it the mismanagement by a director of a company.

In case of improper administration (or improper performance) of a Dutch company, the director can be held personally liable (directors’ liability). According to Dutch insolvency law directors’ liability is assumed in bankruptcies if it is likely that improper administration was the cause of the bankruptcy. In that case the board could be held liable for the debts of the company.

Whether improper administration exists depends on the circumstances. Violation of one’s accounting obligation is considered as improper administration under Dutch law.


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