MACAU SAR, CHINA Law and Practice Contributed by: Calvin Tinlop Chui and Carla Veiga, Lektou
7. Duties and Liability of Directors and Officers 7.1 Duties of Directors Under Macau law, directors are responsible for run - ning the company and acting in its best interests. They must be careful and act like good managers. Directors must also file for bankruptcy if necessary. Directors can be held responsible to creditors if the company does not have enough money to pay them, and the directors have acted contrary to the law or articles of association, which are designed to protect creditors. 7.2 Personal Liability of Directors Directors have a legal duty to compensate the com - pany for any loss caused by their breach of duty imposed by law or the articles of association. They can only avoid liability only if they can prove that they acted without fault. Directors are also liable to the company’s creditors if, in breach of a provision of the law or of the articles of association aimed at their protection, the compa - ny’s assets become insufficient to meet the creditors’ claims. Therefore, if the directors have acted to the detriment of the company’s assets or creditors, the company may, within three months of the resolution, bring an action against the administration of the company. This action is subject to a resolution of the shareholders, passed by a simple majority, resulting in the dismissal of the directors concerned. If the company or its shareholders have not already done so, the company’s creditors may exercise the right of indemnification to which the company is enti - tled. This is subject to the condition that there is a serious risk of a substantial reduction in the patrimo - nial guarantee. After the declaration of bankruptcy, claims alleging breach of duties owed by directors to creditors are exclusively brought by the bankruptcy administrator.
7.3 Duties and Personal Liability of Officers The bankruptcy administrator’s duties include the fol - lowing. • Initially, these duties are to assist and supervise the debtor’s actions in the management of the com - pany and the administration of its assets, issuing circulars to the creditors informing them of the meeting of creditors, drafting the report to be sub - mitted to the meeting of creditors and proposing to the court the measures deemed appropriate to safeguard the interests of the creditors in the event of a risk of loss or dissipation of the assets. • Once the bankruptcy has been declared, the bankruptcy administrator may carry out all ordinary administrative acts in respect of the bankrupt’s assets; the exercise of any special powers is subject to the express authorisation of the public prosecutor. • In the interests of both the bankrupt and the credi - tors, the bankruptcy administrator should execute whatever is suitable for safeguarding and enabling the bankrupt’s rights. • Additionally, the bankruptcy administrator must probe into the bankrupt’s estate, the circumstances under which business was conducted, and the trig - gers for the insolvency, to forestall further impover - ishment of the bankrupt’s financial circumstances. The sale of assets belonging to the bankrupt estate is carried out by the bankruptcy administrator under the supervision of the public prosecutor. Once the bankruptcy declaration is final, there will be a sale of all assets listed for the bankruptcy estate, which should be completed within six months (the judge may extend it for a period not exceeding six months, at the request of the bankruptcy administrator and upon hearing the public prosecutor). 7.4 Other Consequences for Directors and Officers Directors can be held responsible for any harm caused to the company by their breach of duties under the law or the company’s articles of association. They can only escape liability if they can prove that they acted responsibly. Directors can be held directly liable to the shareholders for damage caused by their actions in the course of their duties.
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