Liability of Start‑Up Directors

Directors of start-up companies often find themselves in a complex position when taking on new obligations. On the one hand, the start-up depends on investors and suppliers. On the other hand, there is uncertainty about whether the company will be able to meet those obligations.

Maarten Mussche and Anniek Smook have written an article on the boundary between justified optimism and personal liability for start-up directors. They examine the liability risks based on the Beklamel standard. Recent case law shows that courts focus primarily on the company’s future prospects rather than its current financial position. Being transparent towards contracting parties can significantly reduce the risk of personal liability.

The full article (open access) can be read here.