At a glance
- Amendments to the Commercial Companies Law have expand personal liability for executives and directors.
- Personal liability extends to both visible and hidden company managers and directors and managers will be liable with private assets for damages.
- Liability includes negligence, gross error, or violations of company laws.
- The legislation introduces joint and collective responsibility in cases involving multiple violators.
Bahrain has introduced significant amendments to its Commercial Companies Law expanding personal liability for company executives and directors. The key amendment to Article 18 extends personal liability to both visible and hidden company managers. Under the new provisions, directors, board members, and actual managers of shareholding companies and limited liability companies will be personally liable with their private assets for damages affecting the company, shareholders, partners, or third parties. The revised law specifically addresses responsibility in cases of negligence, gross error, or violations of company laws and articles of association. Notably, the amendments establish that liability cannot be avoided even if violations result from board or general assembly decisions, unless the individual formally objected and recorded their opposition in meeting minutes. The legislation introduces joint and collective responsibility in cases involving multiple violators. Absence from meetings where damaging decisions were made does not exempt individuals from liability unless they can prove they were unaware of the decision or unable to object.
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