Newsletter by Hoche Avocats – June 2019 – “Shadow” manager: what risks?

“Shadow” manager: what risks?

Are you sure you are not exposing yourself to the risk of being called a de facto manager?
Shareholder, partner, investment fund manager, commercial director, banker,… you are obviously interested in the management of the company in which you have an interest. But are you too closely and actively involved in it?
Could you, in the event of difficulties, be qualified as a de facto manager and what would be the consequences?
1. How to define a de facto manager?
There is no legal definition of de facto manager. It is left to the sovereign discretion of the judges of the merits. But a de facto manager assumes the same responsibilities as the de jure manager, the only one regularly vested
with a corporate office.
The doctrine generally defines a de facto officer as one who “in full sovereignty and independence, exercises a positive activity of management and direction”
(Prof. J-L Rives-Lange), thus exercising de facto an irregular power, which is not legally attributed to him. Therefore, a simple supervisory or control role (as in the case of a supervisory board) does not meet these conditions.