If you are suspected of fraudulent or wrongful trading, action may be taken against you which could lead to personal liability for your company’s debts, criminal prosecution, a fine, and/or disqualification as a director.
If you have personally guaranteed the company’s debts, you will be required to honour those guarantees. You could also face personal insolvency and possibly bankruptcy proceedings, if you are unable to pay.
Otherwise, however, there should be no significant consequences. You can continue to act as a director of other companies (though your credibility may suffer). For the next five years, however, you are not allowed to be a director of another company with a similar name without the court’s permission. (This helps to prevent unscrupulous directors of failed companies from setting up a so-called ‘phoenix’ company which then carries on the same line of business, with a similar name to the failed company, without being obliged to pay back the original company’s creditors.) If you wish to trade under the same name in a new company, there is a procedure to be followed. You should seek specialist legal advice.
Next Steps
If you want to find out anything further about this topic then please feel free to call on 0330 236 9930, 0330 236 9938 or 07961 116321. All conversations will be in strict confidence. You can also email vee@navigatebr.com
This article is for information and interest only. It is not a substitute for full professional advice, which will take in to account the specific and individual circumstances. Navigate Business Recovery Limited cannot accept any responsibility for any loss arising because of any person or organisation acting or refraining from acting on any information.
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