Personally Liable For Company Debts?

Do you really want to know the truth about being held personally liable for company debts? As a company director, you are tasked with a great deal of responsibility. One of the most important responsibilities is managing the company’s debt. If a company director fails to manage company debt responsibly, they may become personally liable for the company’s debt. This means the director’s personal assets, such as property, can be sold to cover the debt.

The most common way a director can become personally liable for company debt is by not keeping accurate records. For example, not filing taxes on time or failing to pay creditors and employees can lead to serious penalties and fines, which can ultimately be the responsibility of the director.

Another way a company director can become personally liable for company debt is by signing a personal guarantee on a loan or other debt. This means the director is responsible for any debt the company fails to pay.

In addition, if a company director fails to properly operate the company or take the necessary steps to protect the company and its assets, they can be held liable for any losses the company incurs. This could include any resulting debt the company may have.

Being a company director is a big responsibility. It is important to stay informed and take the necessary steps to ensure the company is operating correctly and within the law. This will help protect the director from becoming personally liable for company debt.