LIECHTENSTEIN Law and Practice Contributed by: Alexander Appel, Andreas Schurti and Hemma Kohlfürst, Schurti Partners Attorneys-at-Law Ltd.
that the corporation’s financial documents are in line with the applicable accounting standards. 4.8 Consequences and Enforcement of Breach of Directors’ Duties Depending on the claim at hand, the corpora - tion itself or, alternatively, the creditors of the corporation can enforce such a breach. If such breach can be proven, the main consequence for the respective board member will be an obli - gation to pay damages. For board members of regulated companies, additional sanctions may apply. To the extent the breach also qualifies as a crime under the Liechtenstein Criminal Code, the sanctions can also include fines and impris - onment. Liechtenstein law provides for the personal lia - bility of board members in the event they have infringed their legal obligations and duties. For such liability, not only damage must be proven, but also that the board member acted intention - ally or negligently, and that such conduct caused the damage. The liability of various board mem - bers is of joint and several nature. Board mem - bers are liable for their wilful or intentional mis- conduct and their negligence. If a board member is liable for damages, the legal entity can only assert such damages against a board member if such board member has not been released from liability due to a discharge resolved by the share - holder meeting. If the corporation has no claim for damages, it is possible that the sharehold - ers can directly enforce their claim for damages against the board members. 4.9 Other Bases for Claims/Enforcement Against Directors/Officers It is common for board members and/or the members of the management of larger corpora - tions to be insured under a D&O insurance. In this context, it is acceptable that the respective
company pays the insurance premium for the board members and the members of the man- agement. However, it would not be compatible with the law if the company accepted an obligation to indemnify the board members, and the members of the management against any and all liabili - ties that they incur towards the company or its shareholders. Nonetheless, it is possible for a company to agree to such indemnity in a specific case/lawsuit. 4.10 Approvals and Restrictions Concerning Payments to Directors/ Officers This depends on the size of the company. For smaller companies there are no major statutory law restrictions, but market practice will fre - quently set the limits for the respective remu - neration/fee amounts. Conversely, for public companies a number of statutory law restrictions exist under the PCA and under certain regula - tory laws. The latter, however, apply only to the respective regulated companies, such as banks or insurers. For listed companies, shareholder approval may be required for the remuneration of board members and members of the man- agement. 4.11 Disclosure of Payments to Directors/Officers Publicly traded companies must disclose this information in their annual report. For regulated companies, such as banks and insurers, addi - tional specific requirements exist in this regard (also regarding the structure and the degree of detail for such disclosure).
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