Countries › Paraguay › Guide › 15. Exiting › Director, liquidator and shareholder liability on exit

Director, liquidator and shareholder liability on exit

Last verified: 2026-10-28 · Status: Stable

Shareholders of an S.A., S.R.L. or EAS generally risk only their contribution, but directors, managers, legal representatives and liquidators carry personal exposure for tax, creditor and company claims if they act negligently or in bad faith. Representatives who are not diligent are subsidiarily liable for the company's taxes up to the assets they manage, without limit if they acted with intent. S.R.L. sellers stay liable for two years after assigning their quotas, and fraudulent conduct in a bankruptcy is referred to the criminal courts.

USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation for 28 October 2026 (bcp.gov.py cotización referencial). Minimum wage figures use Resolución MTESS 670/2026: monthly PYG 3,044,000, daily for monthly paid workers PYG 101,467 and daily minimum wage (jornal) PYG 117,077, from 1 July 2026. Conversions are for orientation only.

Key facts

Window after which any shareholder can sue directors if the company does not	3 monthsCódigo Civil art. 1114, as of 2026-10-28 · in force
S.R.L. seller's joint liability for company debts after registered assignment	2 yearsCódigo Civil art. 1165, as of 2026-10-28 · in force
Tax liability of non diligent representatives	Subsidiary, up to assets managed; unlimited with intent Ley 125/1991 art. 182, as of 2026-10-28 · in force

The rule

1. Tax liability of representatives. Legal and voluntary representatives who do not act with due diligence regarding tax rules are subsidiarily liable for the taxes of those they represent, limited to the value of the assets they manage or dispose of, and unlimited if they acted with intent. Representatives are jointly liable for fines on infringements in which they actively took part, and companies are jointly liable for fines on infringements by their representatives.
Cost to do it: Personal exposure up to the assets managed.
Example: A liquidator who distributes PYG 800,000,000 to shareholders while PYG 200,000,000 of IRE is unpaid can be pursued for that tax up to the assets handled. / About US$34,081 of personal exposure.Ley Nº 125/1991 Que establece el nuevo régimen tributario, Art. 182 and 184, 1991-12-18 official text · verified 2026-10-28

2. Directors and administrators. Directors are unlimitedly and jointly liable to the company, shareholders and third parties for failure or poor performance of their mandate, breach of the law or bylaws and any damage caused by intent, abuse of powers or gross negligence; a director who did not take part or recorded written dissent and informed the auditors before liability is claimed is exempt. The company's action is decided by the shareholders meeting, even in liquidation; if not started within three months, any shareholder can bring it. Administrators are also liable to company creditors for failing to preserve the company's assets, and creditors may sue when the assets are insufficient; in bankruptcy the trustee brings the action. EAS legal representatives and directors are subject to the same S.A. rules.
Cost to do it: Personal exposure; directors' and officers' insurance is market priced.
Example: A director who voted for an early dividend that left the company unable to pay suppliers can be sued by those creditors once assets prove insufficient. / Not quantified.Ley Nº 1183/1985 Código Civil; Ley Nº 6480/2020 Que crea la Empresa por Acciones Simplificadas (EAS), Civil Code art. 1111 to 1116; Ley 6480 art. 28, 1985-12-18 official text · verified 2026-10-28

3. Liquidators. Liquidators have the obligations and liability of administrators, must not distribute company assets to partners until creditors are paid or reserved for, and represent the company in court. A foreign company's representative carries the same liability as administrators.
Cost to do it: Personal exposure for premature payouts.
Example: A liquidator who pays out the surplus before settling a disputed supplier claim answers for it personally. / Not quantified.Ley Nº 1183/1985 Código Civil, Art. 1007, 1010 and 1200, 1985-12-18 official text · verified 2026-10-28

4. Shareholders and members. Once an EAS has legal personality, only the company answers for its obligations; members are not liable for its labor, tax or other obligations beyond their committed contributions (they are jointly and unlimitedly liable for obligations contracted before registration). S.R.L. partners guarantee to third parties the payment of cash contributions and the value of in kind contributions; after an assignment the seller stays jointly liable with the buyers for company obligations contracted up to two years after registering the assignment. Shareholders who knowingly voted for a void resolution are unlimitedly and jointly liable for its consequences.
Cost to do it: Limited to contributions in the ordinary case.
Example: A foreign parent of an EAS that paid in its full contribution is not liable for the EAS's unpaid taxes after closure, absent other grounds. / Not quantified.Ley Nº 6480/2020 Que crea la Empresa por Acciones Simplificadas (EAS); Ley Nº 1183/1985 Código Civil, Ley 6480 art. 4; Civil Code art. 1101 and 1165, 2020-01-08 official text · verified 2026-10-28

5. Buyers and successors. Buyers of businesses who do not obtain a tax clearance certificate are jointly liable for the seller's tax debts up to the value received, for one year from when the tax office learned of the transfer. The former employer is jointly liable with the new one for pre transfer labor obligations for six months.
Cost to do it: Liability up to the value received (tax) and six months joint labor liability.
Example: Asset buyer for PYG 2,000,000,000 without certificate: exposed to the seller's taxes up to PYG 2,000,000,000. / Up to about US$340,814.Ley Nº 125/1991 Que establece el nuevo régimen tributario; Ley Nº 213/1993 Código del Trabajo, Ley 125 art. 183; Código del Trabajo art. 28, 1991-12-18 official text · verified 2026-10-28

6. Bankruptcy conduct review. If the trustee reports wilful misconduct, the court opens a procedure to qualify the debtor's conduct as fraudulent or negligent; criminal sanctions against directors, managers or representatives are taken into account and findings are sent to the criminal court. Hiding assets, inventing expenses or losses or failing to account for assets can support a fraudulent finding.
Cost to do it: Personal and criminal exposure.
Example: Assets moved to a related company before filing can lead to a fraudulent qualification. / Not quantified.Ley Nº 154/1969 De Quiebras, Art. 160 to 165, 1969-12-09 official text · verified 2026-10-28

Worked example

Before distributing a liquidation surplus to a foreign parent, the liquidator obtains tax and labor clearance and reserves for disputed claims; paying first exposes the liquidator personally under Civil Code art. 1007 and 1010 and Ley 125 art. 182.

Step by step

Record dissent in writing when you disagree with a board decision and inform the auditors.
As liquidator, pay or reserve for all creditors before any distribution.
Keep tax filings current until RUC cancellation; representatives answer for diligence.
In an S.R.L. exit, register the assignment promptly; the two year guarantee runs from registration.
Keep D and O cover in place through the liquidation.

Common traps

Approval of the accounts by the meeting does not protect directors where the breach is of the law or bylaws or 20 percent of capital opposed the waiver (art. 1112).
Limited liability does not cover representatives who neglected tax duties.
Unpaid in kind contribution values can come back to S.R.L. partners.

Sources

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