When is a director liable for corporate debts according to the Revised Corporation Code?

A director is held liable for corporate debts under the Revised Corporation Code specifically when they engage in gross neglect or commit fraud. This liability stems from the principle that directors have a fiduciary duty to act in the best interests of the corporation and its shareholders. If a director is found to have failed in this duty through significant neglect of their responsibilities or through deceptive practices that harm the corporation, they can be personally liable for the resulting debts or losses.

The role of a director comes with the expectation of due diligence and care, and failing to meet this standard can result in significant financial consequences. This provision is intended to promote accountability for directors, ensuring that they act responsibly in managing corporate affairs. The other options presented do not specifically address the conditions under which directors can be held financially liable for corporate debts, making the first option the most accurate portrayal of the circumstances leading to such liability.