Tax Advisors and Delayed Insolvency Filing: Advisor Liability for Damages Caused by Delayed Insolvency Filing (2025)

Advisor liability for delayed insolvency filing: fundamentals and risks

Delayed insolvency filing is one of the most common white-collar crimes. While managing directors’ duties are clearly defined—especially the duty to file to avoid delayed insolvency filing, which is expressly set out in Section 15a InsO—advisors also face a significant liability risk. Advisor liability in cases of delayed insolvency filing primarily affects tax advisors and auditors who support companies in crisis.

Key points at a glance:

• • Tax advisors may be liable under both civil and criminal law
  • Decisive is the duty to provide guidance when insolvency maturity is identifiable
  • Aiding and abetting delayed insolvency filing may apply in cases of active support
  • Documenting all guidance is essential
  • StaRUG has expanded liability risks

Important: While the managing directors of legal entities required to file under Section 15a InsO—including, for example, the GmbH, AG, UG, commercial association, or foundation—are obliged to file for insolvency, advisors are subject to duties to inform and warn, the breach of which has liability-law consequences.

When does a tax advisor have a duty to provide guidance?

According to BGH case law, a duty to provide guidance exists if:

• • The advisor becomes aware of circumstances indicating insolvency maturity—this also applies if these circumstances arise from information obtained outside the specific engagement in question
  • Insolvency maturity is identifiable to a diligent advisor—the tax advisor is obliged to work precisely and to present the findings obtained to the client in a plausible manner
  • The client may not recognize the crisis signals—this applies in particular where the client’s impending insolvency maturity is obvious to the tax advisor

Typical indicators that trigger a duty to provide guidance:

1. 1. Persistent account overdrafts
   2. An accumulation of reminders and enforcement measures
   3. Non-payment of taxes and social security contributions
   4. Negative development of equity
   5. Ongoing loss situation, particularly apparent from the annual financial statements

Practical note: The duty to provide guidance extends not only to possible insolvency maturity, but also to the resulting duties of the managing director of the legal entity.

Insolvency and the advisor’s criminal liability: aiding and abetting delayed insolvency filing

Tax advisors may incur criminal liability through:

• • Aiding and abetting delayed insolvency filing pursuant to Sections 830, 840 BGB in conjunction with Section 823 BGB, Section 15a(4) InsO, Section 27 StGB.
  • Aiding and abetting bankruptcy pursuant to Sections 283 et seq. in conjunction with Section 27 StGB
  • In serious cases: co-perpetration

Requirements for criminal liability for aiding and abetting delayed insolvency filing:

1. 1. Intentional unlawful principal offense by the managing director
   2. Intentional act of assistance by the advisor
   3. Causality between the assistance and the principal offense
   4. Intent on the part of the advisor regarding the principal offense and the act of assistance

Typical forms of criminal aiding and abetting:

• • Manipulated financial statements to conceal insolvency maturity
  • Active advice aimed at avoiding the insolvency filing
  • Incorrect going-concern forecasts
  • Concealment of assets

For further details on criminal-law consequences, please read our article on penalties for delayed insolvency filing.

Civil-law liability risks

Civil liability may arise from various directions:

1. Claims by the client:

• • Claims for damages due to breach of contract (Sections 280(1), 675(1), 241(2) BGB) for breach of a duty to inform and warn (with additional reference to Section 252(1) No. 2 HGB)
  • Assertion by the insolvency administrator
  • Includes the quota damage caused by late filing

2. Claims by new creditors:

• • Tort claims under Section 823(2) BGB in conjunction with Section 15a InsO
  • Reliance damage of creditors who contracted after insolvency maturity
  • May include the full loss of the claim

3. Claims by the tax authorities:

• • In cases of involvement in tax evasion
  • Liability under Section 71 AO for taxes not remitted
  • Criminal liability under Section 266a StGB (failure to remit social security contributions)

The scope of liability can be existentially threatening and includes:

• • Damage from deepening insolvency
  • Full new-creditor damages
  • Proceeding costs
  • Personal unlimited liability

Special rules apply to sole proprietors. More on this in our article delayed insolvency filing as a sole proprietor & private individuals.

Risk-mitigation strategies for advisors

1. Documenting all guidance:

• • Written guidance at the first signs of crisis
  • Meeting minutes signed by the client
  • Registered letter with return receipt for critical guidance
  • Regular updates in the event of an ongoing crisis

2. Clear delimitation of the mandate:

• • Precise definition of the scope of advice—while also pointing out information that arises outside the specific engagement insofar as it suggests, for example, a possible duty to file for insolvency under Section 15a(1) InsO
  • Exclusion of insolvency-maturity review in the standard mandate
  • Recommendation of specialized attorneys and insolvency advisors
  • Delimitation from legal advice

3. Systematic monitoring:

• • “Crisis traffic light” system in mandate handling
  • Defined escalation levels
  • In particular, disclosure of findings that become apparent when preparing the annual financial statements
  • Regular internal case discussions
  • Systematic analysis of financial ratios

4. Insurance coverage:

• • Review of the scope of coverage
  • Adjustment of the sum insured
  • Observance of exclusion clauses
  • Timely reporting of potential claims

Protective effect of proper guidance and documentation

Legally correct compliance with duties to inform and warn provides an important protective effect for tax advisors and auditors. This protective effect extends across several levels:

Civil-law protective effect:

• • Exclusion of liability vis-à-vis the client
  • Defense against recourse claims by the insolvency administrator
  • Protection against claims by harmed new creditors
  • Relief in questions of causation through substantiated evidence of compliance with duties to warn and inform

Criminal-law protective effect:

• • Failure of the allegation of aiding and abetting due to lack of intent
  • Documented guidance and proof of professional diligence as a basis for exculpatory evidence
  • Avoidance of the allegation of intentional assistance

Professional-law protective effect:

• • Compliance with professional duties of care
  • Avoidance of professional-law sanctions
  • Protection of professional licensure
  • Proof of acting lege artis

Important: The full protective effect arises only with qualified guidance—it must be specific, in writing, appropriate for the addressee, verifiable, and timely. In cases of insolvency maturity, the relevant circumstances must be specified. With regard to potential criminal liability for delayed insolvency filing, a mere reference to filing for insolvency and preparing an over-indebtedness balance sheet is not sufficient.

Current case law (2023–2025)

Case law has developed dynamically:

BGH, judgment of November 15, 2023 – IV ZR 277/22

In this judgment, the Federal Court of Justice addressed the question of the extent to which a tax advisor is liable for entrepreneurial risks, particularly where the advisor is involved in entrepreneurial decisions. The BGH clarified that a breach in the area of an entrepreneurial risk exists if the tax advisor either acts entrepreneurially in a third-party company or if the advisor’s own investment decisions influence their conduct. This underscores the importance of clearly distinguishing between advisory activity and entrepreneurial involvement in order to minimize liability risks.

OLG Düsseldorf, judgment of September 24, 2024 – I-23 U 217/22

The Higher Regional Court of Düsseldorf held that tax advisors also have a duty to provide guidance outside a narrow mandate relationship if they recognize indications of insolvency maturity. This means advisors are obliged to inform their clients about possible duties to file for insolvency even if this was not expressly agreed in the mandate. The specific engagement therefore does not limit potential liability risks.

Literature reference: “The duty to file for insolvency in cases of over-indebtedness” A comprehensive overview of the duties and risks associated with the duty to file for insolvency in cases of over-indebtedness is provided in the work “The duty to file for insolvency in cases of over-indebtedness“. This publication offers detailed insights into the legal framework and is a valuable source of information for advisors.

Case examples from our attorneys’ law-firm practice

Case 1: Successful defense against insolvency administrator claims

A tax advisor was able to prove that he:

• • Provided written guidance at an early stage
  • Recommended consulting an insolvency law specialist
  • Documented all warnings
  • Clearly delimited the mandate

Case 2: Discontinuation of an investigation

An auditor was able to prove that:

• • His going-concern forecast was prepared in a methodologically correct manner
  • At the time of the review, there were still prospects of restructuring
  • He had documented the limits of the forecast
  • He had no knowledge of the subsequent deterioration

Case 3: Limitation of liability through settlement

In the event of a failure to provide guidance, liability could be limited through:

• • Partial acknowledgment
  • Disputing the causal link
  • Settlement negotiations

Conclusion – avoiding delayed insolvency filing and advisor liability

Advisor liability in cases of delayed insolvency filing has become a significant risk for tax advisors. Case law has continuously tightened the requirements, while StaRUG has created additional duties.

Key takeaways:

1. 1. Comprehensive duties to inform when crisis signals are identifiable
   2. Documentation is key to avoiding liability
   3. Risk of criminal liability in cases of active support
   4. Duties to inform and warn may also be triggered by information outside the specific engagement and increase liability risks
   5. Clear delimitation of the mandate is essential
   6. Increased requirements due to StaRUG

Recommendations:

• • Establish systematic early crisis detection
  • Proactive, clear communication with the client
  • Build an interdisciplinary network of experts
  • Monitor current case law
  • Optimize insurance coverage
  • Careful client selection