SLEEPING DIRECTOR-DO NOT BE IGNORANT

Posted by admin In Debts 9 Comments

Written by Shane

Created: 12 November 2013

Question:
Can a director of a company who has not signed a personal guarantee be liable for a company’s debts?

The answer is YES!

The notion of limited liability applies to a persons shareholding. A director owes various duties to the company and ultimately the creditors of the company.

If a director allows a business to be carried out in such a way as to create a substantial risk of serious loss to creditors, the director can be sued for the resulting loss.

Whether you are a large company or a small one, the risks are the same. Get your corporate governance right.

Disclaimer:
This is not legal advice. Do not act upon anything contained in this article without seeking independent legal advice.