Under Company Act Article 23, paragraph 1, a company's responsible persons must perform their duties with loyalty and with the care of a good administrator. A responsible person whose breach causes the company loss must compensate the company. Self-dealing, and related-party transactions pushed through without the company's internal approvals, are where loyalty claims most often arise.
Paragraph 2 looks outward. If a responsible person, while conducting the company's business, violates the law and thereby injures someone else, that person is jointly liable with the company to the injured party. Suing the company for an unpaid contract debt and adding the responsible person as a co-defendant for a violation of law are two different claims with different elements.
Who counts as a responsible person
Company Act Article 8 answers this by company type. In a limited company and a company limited by shares, the responsible persons are the directors. Managers, liquidators and provisional administrators, and in a company limited by shares also promoters, supervisors, inspectors, reorganizers and reorganization supervisors, are responsible persons within the scope of their duties. Once a company dissolves, its liquidators therefore carry responsible-person status for the liquidation work; the procedure itself is covered in Company dissolution and liquidation.
Article 8(3) reaches people without a board seat. Someone who is not a director but in substance performs a director's functions, or who in substance controls the company's personnel, finances or business and directs the directors, bears the same civil, criminal and administrative-penalty liability as a director. The provision does not apply where the government, for purposes such as economic development or social stability, directs directors it has appointed.
A director nominated by a foreign parent and registered on a Taiwan subsidiary's board is a responsible person under Taiwan law. Nothing in Article 23 excuses a breach because the instruction came from the parent.
Who sues whom
The paragraph 1 claim belongs to the company, so the company is the plaintiff. If the company does not act, Company Act Article 214 provides a derivative route: in a company limited by shares, a shareholder who has held at least 1% of the issued shares continuously for six months or more may ask the supervisors in writing to sue the director for the company. If the supervisors have not sued within 30 days of the request, the shareholder may bring the action for the company.
Under paragraph 2 the injured third party may sue the company and the responsible person together. That party must show the responsible person's conduct of company business, a violation of law in that conduct, the loss, and causation. The fact that the company failed to pay does not by itself satisfy these elements.
Limitation period
The Supreme Court Civil Grand Chamber ruled in 112 Tai-Shang-Da No. 1305 that a paragraph 2 claim is subject to Civil Code Article 197(1) (Judicial Yuan press release, announced 26 July 2024): two years from when the claimant knew of the injury and the person liable, and ten years from the wrongful act. The earlier view in precedent 76 Tai-Shang No. 2474, which treated the claim as a special statutory liability subject to the general 15-year period under Civil Code Article 125, no longer applies. When a claimant actually knew of the injury and the person liable is a factual question, so the start date has to be worked out case by case.
Evidence
Board minutes, contracts, accounting records, emails and internal approval trails are what show whether a duty was breached or a law violated, and who took part in the decision. Whether the dispute belongs in the Commercial Court is explained in Commercial court jurisdiction. Shareholders and creditors outside Taiwan can read Hiring a Taiwan lawyer from abroad for how the work is handled remotely.
Please send the company registration extract, board materials and a breakdown of the loss.
Contact Attorney Wei Tseng (曾雋崴), Hovering International Law Firm: wei@hoveringlaw.com.tw. Address: 7F-2, No. 35, Sec. 1, Chengde Rd., Datong Dist., Taipei City 103, Taiwan (103 臺北市大同區承德路一段35號7樓之2).
Official sources
- Company Act Art. 8.
- Company Act Art. 23.
- Company Act Art. 214.
- Civil Code Art. 125.
- Civil Code Art. 197.
- Judicial Yuan press release: Supreme Court Civil Grand Chamber, 112 Tai-Shang-Da No. 1305.
Verified: 2 October 2026
Frequently Asked Questions
- Is only the chair a responsible person?
- No. Under Company Act Article 8, the responsible persons of a company limited by shares are its directors, and managers, liquidators, supervisors and certain other officers are responsible persons within the scope of their duties. A business-card title is not enough; registration, the basis of appointment and what the person actually did all matter.
- If the company cannot pay a contract debt, is the responsible person always personally liable?
- No. Paragraph 2 requires that the responsible person, in conducting the company's business, violated law and thereby harmed another. Mere non-performance by the company is not enough. Capital, accounting or liquidation duties under other articles are a separate question.
- How long do claimants have to sue under paragraph 2?
- The Supreme Court Civil Grand Chamber (112 Tai-Shang-Da No. 1305) applies Civil Code Article 197(1): two years from knowledge of the injury and the person liable, ten years from the act. When the period starts still depends on the facts.
This article provides general information and is not legal advice on any individual matter.
