Operating through a Limited Company gives its Directors a great deal of protection. Providing they act in good faith and with their best endeavours, in the event that their Company enters insolvent Liquidation, they will not be held personally liable for the Company’s debts, other than those for which they have given specific personal guarantees.
A Director can however be held liable for Wrongful Trading if he or she should have concluded earlier that there was no reasonable prospect of avoiding Liquidation. In that situation the Director(s) can be held liable for any new debts created beyond that point.
It is therefore imperative that Directors seek advice at the earliest possible opportunity. With the right advice it is usually possible to save the business in some shape or form and, providing you have acted in good faith and depending on circumstances, minimise or even eliminate any personal liability.
Possible warning signs which should lead a Director to consider taking specialist advice include:
If any of these circumstances apply to you and your Company please call our Licensed Insolvency Practitioner, Steve Ford, direct on 07718 133927, for a free confidential chat. Alternatively, complete this contact form and Steve will give you a call ASAP.