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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Liu Yiran
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DOI:10.17265/1548-6605/2026.01.003
Macau University of Science and Technology, Macau, China
Within the context of Chinese civil and commercial law, the theoretical justification and the nature of directors’ compensation liability to creditors have long been contentious. On theoretical legitimacy, in academic circles, distinct doctrinal divisions have formed, encompassing both affirmative and negative positions, within three key analytical perspectives: the nature of legal personhood, the employer-employee relationship, and statutory duties. Concerning the nature of liability, it remains disputed whether it should be regarded as an extension of general civil tort liability under the context of company law or as an independent statutory tort liability under company law. This paper first categorizes existing theories, clarifies their main viewpoints and justificatory processes, and offers a critical assessment. Next, an empirical analysis of judicial cases is conducted to evaluate the practical influence of these doctrines on judicial decisions. Finally, recommendations for current judicial practice are put forward, specifically advocating for the introduction of the Business Judgment Rule into Chinese Company Law, employing the company’s operational status as the criterion to determine whether directors should bear liability. Regarding the extent of such liability, focus should be placed on the directors’ degree of fault, their status, and the resultant harm, thereby enabling differentiated attribution of liability. Furthermore, emphasis should be placed on coordinating the directors’ liability insurance system to effectively balance legal liability with commercial interests.
directors’ duties, directors’ liability, creditor remedies, tortious damage compensation liability
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