my wife(really) is a company director of a family business, it’s her dad’s company and she is the second director. The company is insolvent, hasn’t been trading for the past year and now she has a judgement against her for unpaid rates, 50k
how will this affect her personally? Will it affect her credit rating for a mortgage? Thanks
My understanding is that it requires a court to state that a director is personally liable for the debts of a company - this is probably the High Court and occurs when the company is put into liquidation. Breaching the corporate veil, as the lingo goes, and making a director personally liable for company is a fairly rare event to the best of my knowledge and reckless trading is required to be shown. I would stress that I'm not a solicitor and this is merely my understanding.
If a judgement was made against the company then the debt has "died" with the company. if your wife gave a personal guarantee towards the debts of the company then she can be held personally liable for the outstanding debts.
A creditor/shareholder must prove a Director acted Fraudulently in his role if a Director is to be held personally liable for the debts of a company (where no personal guarantee exists). Proving a director acted fraudulently is very difficult to prove in the courts.