Paragraph 2 of Article 23 of the Company Act provides, “If the responsible person of a company has, in the course of conducting the business operations, violated any provision of the applicable laws and/or regulations and thus caused damage to any other person, he/she shall be liable, jointly and severally, for the damage to such other person.” According to the opinions of the Taiwan Supreme Court (Taiwan Supreme Court’s judgment 103-Tai-Shang-Zi No. 2177; Taiwan Supreme Court’s judgment 102-Tai-Shang-Zi No. 944), a company responsible person’s joint and several liability provided herein is not considered a tort liability but is based on a special provision of the law. Hence, an extinctive prescription of 15 years as provided in Article 125 of the Civil Code shall apply in this case.

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However, lately, the Taiwan Supreme Court seems to have changed its opinion. The Taiwan Supreme Court’s judgment 107-Tai-Shang-Zi No. 1498 holds that the cause of such joint and several liability has the nature of tort. Since the Company Act does not provide specifically in regard to the extinctive prescription (statute of limitations) for a claim of such damage compensation, then the shorter period as provided in Paragraph 1 of Article 197 of the Civil Code shall apply. In addition, Taiwan Supreme Court’s judgment 108-Tai-Shang-Zi No. 185 further added: Since Taiwan’s legislative practice integrates the commercial matters into the civil matters, if the commercial law does not provide for a certain matter and the nature of the matter is not incompatible, the relevant provisions of Civil Code will certainly apply. Therefore, the application of the short-term extinctive prescription (statute of limitations) in the Civil Code does not contradict the Company Act’s nature as of commercial law.    

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Based on the aforesaid opinion of the Taiwan Supreme Court, the extinctive prescription (statute of limitations) for joint and several liability of a company’s responsible person will be greatly reduced from 15 years to 2 years (if the creditor is unaware of the situation, it would be 10 years). This will significantly affect a creditor’s right to claim and will also become a focal point of the dispute in litigation, such as: Should Article 197 or Article 125 of the Civil Code apply? When did the claimant become aware of the damage or when did the claim become claimable? Therefore, it is worthy of observation whether such opinion will become an established opinion of the Taiwan Supreme Court.

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