The question I have been asked every working day in 2021 is….
Will I be personally liable for a Bounce Back Loan if I close my company?
The answer is no – if you are a limited company or a limited liability partnership. You are not personally liable for the Bounce Back Loan. However sole traders and partnerships (non-LLP) will be personally liable for the Bounce Back Loan as they will be for all business debts.
The general rule of liquidation is that the business assets are used to pay the business creditors first. If there are insufficient business assets and there is a shortfall then those creditors will not get paid in full – and sometimes not at all.
Those creditors who do not get paid in full can not pursue the directors or shareholders personally and that includes the bank who have lent a Bounce Back Loan. The bank will claim the Bounce Back Loan shortfall from the Government.
If you need to discuss a Bounce Back Loan or a Coronavirus Business Intervention Loan (“CBIL’s”) just get in touch with me by email.