Tips to limit your liability as a director
- The basis
- 14 April 2025
- Edited 14 April 2025
- 1 min
- Rules and laws
Directors of associations do not always make good decisions. How do you make sure that, as a director, you do not have to bear the consequences of a wrong decision? 5 tips to avoid being personally liable.
1. Register at the KVK
Only when an association (vereniging) is founded with a civil-law notary and registered in the Business Register, directors are not personally liable. So, check whether the association was founded with the help of a civil-law notary and is registered in the Business Register. Note that in case of mismanagement, you can always be personally liable.
2. Read the articles of association
Read the association's articles of association carefully. An association established by a civil-law notary has articles of association. These state who has which authorities, how the board takes decisions, and how board members are accountable. Board resolutions that conflict with the articles of association are invalid. An invalid decision can have major consequences.
3. Check the financial statements
Study the association's financial statements. Financial statements show how the association is doing. Is there a shortage or is there enough money to absorb setbacks? Look at the financial statements from several years to see how that financial situation came about.
4. Liability insurance
Ask whether the association has liability insurance for directors. If the association does, check what coverage is provided by the insurance. It is never possible to assess and cover all risks in advance.
Also ask how long the insurance has been in place and whether the premium has been paid all those years. Insurers can issue a statement on this. Decisions made by a previous board may negatively affect the current board.
5. Deregistration at the KVK
Are you quitting as a director? Then make sure you are deregistered. Or arrange this yourself in the Business Register. As long as you are registered as a director, you remain liable for decisions. Report changes in the board to the Business Register as soon as possible.
Is your association required to register Ultimate Beneficial Owners (UBOs)? If so, make sure your association also deregisters you as a UBO in the UBO register.
