cease of trade

C

cashless

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as an avid reader i am posting on behalf of my best friend whose in a pickle and is suffering from depression as a result.the story is a bit long winded so i be as brief as possible

limited company formed / 70/30shares,company gets in trouble cant get money in and results in 25k overdraft in the bank personal guarantee by directors.One director (B)hasnt contributed fianically into the company at all

cease trading and one director remortages and pays off bank overdraft and various tax and vat out of own pocket.

my friends (husband )this is still isnt working and they are now penniless. 12 MONTHS later the other director (B)hands in his notice to the company stating that he holds no claims past or present and that he is resigning

questions can he resign just like this ,can he be held liable for any debts ,THE COMPANY STILL OWES monies but should they approach the other director ans ask him

sorry for been so long winded

marie
 
Perhaps I'm missing something but surely the fact that the company is a limited company means that the personal liabilities of all individuals involved are capped? I don't understand why this situation should be causing hardship or your friend to get depressed?
 
You are missing something !

I think the point here is that the directors have offered personal guarantees for the overdraft of the company.
Of course this means that they ae liable.
 
Re: You are missing something !

OK - I see. Thanks. Sorry about that. I really must start reading these posts more carefully... :eek:
 
Directors responsibility

Personal reassurances aside, if it is shown that a director(s) have acted fraudulently, irresponsibly or without due care, then they can not hide behind limited liability.

(I do not mean to imply that any of the directors involved in the original posters query where acting fraudulently etc. just pointing out the "limits" of limited liability)
 
.

Taking into account what Snork Maiden has posted and if everything IS above board then its a bit of a shame that the "various tax and vat" were paid "out of own pocket".

If the company is bust its bust and the revenue are in with any other creditors ( even if they are first in line ) in a liquidation.

'suppose its a bit late now to backtrack on that ?


eDog
 
REPLIES

HOW DO THEY FARE OUT IF THERE IS NO MONEY FOR THE ACCOUNTANT TO PAY THAT IS ?
 
Re: REPLIES

Perhaps I'm missing something but surely the fact that the company is a limited company means that the personal liabilities of all individuals involved are capped?
Click to expand...

Regardless of whether personal guarantees exist, this statement is incorrect. Under our updated Company Law code, directors can and are made legally liable for company debts in the event of business failure or other difficulties where this arises as a result of the negligence of the directors. In this context "negligence" has a very wide definition. Hence the notion of "capping" personal liabilities of individuals involved in limited companies is largely a thing of the past.
 
Re: REPLIES

Regardless of whether personal guarantees exist, this statement is incorrect.
Click to expand...

It wasn't a statement it was a question... :\
 
Re: REPLIES

Fair enough then, sorry for clarifying the matter for you...
 
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