Director Liability Ltd Company

[shires]

Hi been trying to google the question of how much personal liability if any the director of a limited company (based in Scotland) may be liable for.

Brief details: company subject to pre-court enquiries from Trading Standards and it is believed that the company is also contending with the preliminaries of being taken to court by two customers (businesses themselves). There are a number of other complainants (pre-court stage) who say they are preparing complaints which will go through solicitors.

The company accounts have very little to show in them, but the director has significant personal financial assets. How threatened are these personal assets if litigators were to home in on the director's personal liability angle in the event that the complainants were successful against the Ltd Company? Can a director be made personally liable?

Thanks in advance for the feedback guys

 

[Gouldie0]

Hi Shires,

I see this is your first post so I'd just like to say welcome to the forums, there's the introduction setcion within the forums if you'd like to let us know who the face behind the name is.

Regarding your post, my initial reaction is that there isn't enough information there to give you a clear answer and I'd just like to say that a director is only liable to the value that they have (i) invested in the company and (ii) the value of the security they've offered for example against a property or cash (these could be personal assets)

The company is a seperate entity from the directors assets unless they've been put forward as security. I would assume that the business will be going through the process of being liquidated?

Feel free to post more information.

Kind Regards

Neil Gould

 

[shires]

Hello Neil
Thanks for the reply. I'm in England, and I've taken a franchise with a scottish based company. For legal reasons I'm not intending to name the company whilst proceedings are about to start (and we believe some others unrelated to us have already started separately),as overt mentions on forums often don't go down too well anyway. So the company is under Scottish law jurisdiction yet as said I've got involved from England for a better legal perspective from Scotland!

The company is not going through the process of being liquidated and at the present, I'm happy to private message more details to established forum members further info. After investigations the company in question has a very limited account balance as submitted.

We are assessing the situation if we find that the director has secured part or all of the business against personal assets, as we are seeking compensation under terms of misrepresentation, hence the question on directors liability. We're thinking we are in for a bit of a long fight but we are prepared to go the distance to get ourselves back to where we started before getting involved with this company.

 

[Employment Law Services]

Isn't it the case that if a limited company continues to trade whilst insolvent that directors become wholly liable for all business debts? Something called lifting the veil?

 

[shires]

Can anybody recommend a Scotland based franchise solicitor? Happy to take pm's. thanks

 

[Employment Law Services]

You could try David Kaye, Partner at Harper Macleod LLP. Switched on guy and very approachable.