Being a company director can offer you some significant commercial advantages - but it also brings with it legal responsibilities. Each director of a limited company must ensure that the company:
For the director who fails to meet his or her obligations the consequences can be serious, with charges of wrongful trading, fraudulent trading, preferences or misfeasance likely to arise. If the company encounters financial difficulties, it's your responsibility as a director to act decisively.
The law says that it's your responsibility to control the company, even if you are not the main director. If your limited company continues to trade after there is no reasonable prospect of avoiding insolvency, you could become personally liable for its debts.
So do you stop in fear of breaking the law, or do you carry on in the hope of turning things around? Continuing to trade can leave directors liable to contribute personally to the company's losses and be investigated and/or prosecuted by the Department of Industry (DTI). In truth, deciding whether to carry on trading can be a terribly difficult choice - especially when you've invested huge amounts of your time, care and hard work into a business - the impartial advice of a qualified professional can be invaluable in difficult times.
If you are in any doubt about your legal obligations - you need specialist advice - talk to Marshman Price You'll find that the friendly, professional advice of an expert could be just what you need.