Geekzone: technology news, blogs, forums
Guest
Welcome Guest.
You haven't logged in yet. If you don't have an account you can register now.


Decimate

120 posts

Master Geek


#62459 7-Jun-2010 21:06
Send private message

Hi all,

I'm just wondering if anyone knows how protected a director or shareholder of a limited liability company is if the company is liquidated or being chased for debt - I cant find the answer anywhere else.

Specifically - If a company has an unpaid bill or debt, can the 'default' in payment against the company be recorded against an individual shareholder or director or does it go against the companies record.
Likewise, can a debt collection agency repossess items etc from the director shareholder and so on.

Thanks for your help!

Create new topic
sbiddle
29279 posts

Uber Geek

Moderator
Trusted
Biddle Corp
Lifetime subscriber

  #339164 7-Jun-2010 21:34
Send private message

Reasonably well - this is the whole point of a limited liability company. But it's certainly doesn't protect them totally.

It's an issue you're really going to need to seek legal advice on.



nitrotech
1259 posts

Uber Geek


  #339167 7-Jun-2010 21:49
Send private message

Yes seek some legal advice, while the nature of the limited liability company is to protect the directors/owners there are some ways that you could be liable eg. if you've signed a personal guarantee with the company chasing the debt.

 
 
 
 


nate
6407 posts

Uber Geek

Moderator
Trusted
Lifetime subscriber

  #339170 7-Jun-2010 21:57
Send private message

Can you clarify - are you chasing someone over a debt, or are you being chased?

NonprayingMantis
6434 posts

Uber Geek


  #339191 7-Jun-2010 23:23
Send private message

the principle of limited liability means that the maximum amount a shareholder can be liable for in the event of a company going under is the amount he has already paid into the company (i.e. the share capital). IOW, once the company has sold off it's assets to pay for as much debt as it can, any debt remaining is wiped.

However, for the vast majority of small businesses many credit arrangements usually involve the owner signing a personal guarantee - meaning that if the company cannot pay, then they are personally liable for the debt.

They might then declare personal bankruptcy, wiping the personal debt, but also involving some pretty strict penatlies to them (including a very bad credit rating, being forced to sell off ALL their assets topay off as much debt as possible, restrictions on starting a new company etc).

Directors are never liable for the debt of the company, except possibly in very rare cases of extreme negligence. (obviously in many small companies the owner is also a director, so the point is moot in those cases).

If you want professional advice (whether you are the debtor or the creditor) I would seriously suggest paying to see an accountant and/or lawyer for an hour.  Advice from anonymous internet peeps is worth about what you pay for it i.e. nothing.

Create new topic





News »

NASA discovers water on sunlit surface of Moon
Posted 27-Oct-2020 08:30


Huawei introduces new features to Petal Search, Maps and Docs
Posted 26-Oct-2020 18:05


Nokia selected by NASA to build first ever cellular network on the Moon
Posted 21-Oct-2020 08:34


Nanoleaf enhances lighting line with launch of Triangles and Mini Triangles
Posted 17-Oct-2020 20:18


Synology unveils DS16211+
Posted 17-Oct-2020 20:12


Ingram Micro introduces FootfallCam to New Zealand channel
Posted 17-Oct-2020 20:06


Dropbox adopts Virtual First working policy
Posted 17-Oct-2020 19:47


OPPO announces Reno4 Series 5G line-up in NZ
Posted 16-Oct-2020 08:52


Microsoft Highway to a Hundred expands to Asia Pacific
Posted 14-Oct-2020 09:34


Spark turns on 5G in Auckland
Posted 14-Oct-2020 09:29


AMD Launches AMD Ryzen 5000 Series Desktop Processors
Posted 9-Oct-2020 10:13


Teletrac Navman launches integrated multi-camera solution for transport and logistics industry
Posted 8-Oct-2020 10:57


Farmside hits 10,000 RBI customers
Posted 7-Oct-2020 15:32


NordVPN starts deploying colocated servers
Posted 7-Oct-2020 09:00


Google introduces Nest Wifi routers in New Zealand
Posted 7-Oct-2020 05:00









Geekzone Live »

Try automatic live updates from Geekzone directly in your browser, without refreshing the page, with Geekzone Live now.


Support Geekzone »

Our community of supporters help make Geekzone possible. Click the button below to join them.

Support Geezone on PressPatron



Are you subscribed to our RSS feed? You can download the latest headlines and summaries from our stories directly to your computer or smartphone by using a feed reader.

Alternatively, you can receive a daily email with Geekzone updates.