Supporting Businesses Nationally
Personal Liability Concerns
Are you worried about personal liability for
your business’s debts?
How Opus can support business owners and directors
Our team can explain the options available to help return your business to profitability. We help business owners, directors and all stakeholders navigate their way through the uncertainty that distress brings.
I’m worried about my personal liability for company debts
Many Company Directors consult us about whether they could end up having to pay their Company’s debts personally if the business goes into Liquidation or Administration. They hear stories about creditors pursuing Directors for unpaid bills and quite rightly, they worry about it happening to them.
The whole point about trading through a Limited Company is meant to be protecting yourself against this, but unfortunately you can be held personally liable for some or all of its debts for a number of reasons:
• The most common is when you have given a Personal Guarantee to the Company’s bank or to the landlord
• Sometimes suppliers demand some form of guarantee to continue trading with the Company if it is struggling
• If you have taken money out of the Company as a loan
• If you take regular cash drawings, which are normally converted into a dividend at the year end, but the Company’s losses have wiped out its reserves and made any dividend illegal
• If you are found guilty of an offence like Wrongful Trading
• Under certain circumstances, if debts to HMRC are left unpaid
• If you have used a Bounce Back Loan or a Coronavirus Business Interruption Scheme Loan for non-business purposes
Our dedicated team is on hand to provide assistance to Directors of companies in financial difficulties. When a company is insolvent, a Director has a duty to minimise losses to stakeholders. Our senior management are available to talk to you about the problems you and your company face with complete confidentiality.
How do I deal with personal guarantee challenges?
These are complex issues, so getting expert advice is the best starting point.
What actions you can take safely will depend on the up to date state of the Company’s finances, as well as your own. One solution would be a financial restructuring of the Company to avoid failure. If this is not achievable, it may be possible to deal with the personal risks by negotiating a consensual settlement with the creditors involved. If not, it may be best to consider negotiating an Individual Voluntary Arrangement (IVA) with some or all of the creditors who are demanding payment from you personally.
Resources and guides
Our latest articles to support decision making for business owners and directors. These provide an overview on what is going on in the market and information about the options available when a company is facing challenges.
For more information on business options, we offer an initial free consultation to review the situation and make recommendations on the best way forward.
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Opus is authorised and regulated by the Financial Conduct Authority. If you are looking for advice in relation to personal debt, click here to understand more about all options available, the pros and cons for each and fees relating to our services. If you have a complaint, click here for our procedure.