Portland Business & Financial Solutions

Call 08080 42 42 42

Advise me on the personal risks to the directors of trading whilst insolvent

Once a company is insolvent the conduct of the directors will be scrutinised and the area of law surrounding insolvency is very complex and can be a minefield, but ignorance is not a strong defence.

  1. Understand your responsibilites

    As a director you are expected to fully understand your responsibilities and act accordingly.
  2. It would be bad enough to see your business fail and for you to lose your livelihood, but to also fall foul of the law and become liable for the debts of the company would be even worse.

  3. Trading whilst insolvent

    There is, however, some good news and trading whilst insolvent is not itself illegal.
  4. Provided you take professional advice, it is possible to carry on trading even if the company is insolvent.
  5. Trading whilst insolvent without taking steps to protect creditors can, however, lead to the court making a financial award against you usually based upon the increased losses suffered by creditors.

  6. Sensible rescue plan

    Taking every available step to protect creditors’ is not as simple as it might appear but any sensible rescue plan overseen by an insolvency practitioner is probably the best form of protection.

Benefit from our experience

At Portland we often carry out investigations into the conduct of the directors in the period prior to insolvency and have taken action against directors that have fallen foul of the law and as a result we are able to advise directors what to do to ensure that they don’t fall foul of the law.

Call 08080 42 42 42 or contact us to discuss the options available