The failure of any company is distressing enough, and all company debts would be dealt within the liquidator’s work. There could be elements of the liquidation that cause personal exposure and put your assets such as your home, car or savings at risk.
This is an area we specialize in. Personal Guarantees may have been given banks, on leases, on HP or to trade creditors to name a few.
Overdrawn Directors’ account
If you took money from the business, not covered by PAYE salary and/or dividends, the liquidator will seek to recover these very quickly as it is seen as potentially “lowest hanging fruit” for the liquidator. Technically and legally such amounts are recoverable and you are obviously liable.
If you continued to trade knowing the business was insolvent – you could be deemed liable for losses to creditors that could have been avoided.
If money owed to the company exceeds its creditors, then an investigation would show that there was no intent to act irresponsibly. On the other hand, a company that simply cannot and will never be able to pay its creditors in a timely manner may well be guilty of trading insolvently.
Trading Insolvently is a serious offence because the directors know their company is insolvent and have no plans of how they will pay their creditors. It is even worse if the directors allow the level of creditors to increase during this period.
The liquidator must report to the Official Receiver in many ways not least how the directors conducted themselves. To merely say “I know nothing” is not a defence, ignorance is not bliss in this situation. Knowing the personal exposure here vital.
The Appointment of a Liquidator
This may help resolve pressure but be very aware the liquidator can and will turn on you if you are deemed to have either extracted funds and/or not conducted yourself diligently.
In conclusion – know the risks here and take them on with our help!
For a free initial consultation Call Bell & Company today on +44 2895 217 373 – Face your debt crisis with professional help.