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What is a Debenture?
A debenture is a loan agreement in writing between a borrower and a lender registered at Companies House.
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If I close or liquidate a limited company will I be personally liable for the tax debts?
No. As a director or shareholder, you will not be personally liable for the tax debts of a limited company. However, there are some very exceptional circumstances where you can be. They are rare – see more below.
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Do I have to attend the creditors meeting?
If you are a company director and are the proposed chairperson of the creditors meeting then yes you do have to attend the meeting. Normally all directors are asked to attend the creditors meeting (if there is one in person or online) to explain what happened and answer reasonable questions from creditors.
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Help Me To Start Again (Phoenix)
In some cases the right decision for a limited company will be to close and the directors to start up a new business even in the same trade or profession. This is known as a Phoenix.
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Our Club Is Insolvent What Should We Do?
The first issue for a club or society to find out is who is liable for the debts?
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My School Is Insolvent – What Should I Do?
If your school is losing money then you need to consider your possible options.
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My Charity Is Insolvent – What Should I Do?
If your charity is insolvent the duties of Trustees changes. Instead of being there to promote the success of the charity the Trustees duty is to minimise the loss to all creditors. The risk is if you keep going and the finances get worse the Trustees could potentially be liable for the losses to creditors.
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The Twilight Zone – Should I Be Worried About Wrongful Or Fraudulent Trading?
If you are a director of a limited company and it has passed the point of financial no return then you should be concerned if you allow the company to continue to trade. If the financial position gets worse you can be personally liable for the increased debts.
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Directors – How To Avoid Disqualification
As a company director, if you know the financial position is getting worse it is your responsibility to do something about it. The longer it goes on the more chance you have of being disqualified as a director. Disqualification only applies if you were a director or shadow director.
