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Directors

If a director runs up massive debts in a privatate limited company and the company winds down, what happens?

Does the director 'get off' if he hasn't done anything dodgy and the business made loses 'naturally'? (say made 40k profit for 3 years but loses

100k the next)

I take it it won't affect his own personal credit rating and he can set up other private limited companies (again assuming he hasn't done anything dodgy.

Lets assume he is the sole owner of the ltd company. What happens to the debts? Is the business closed down and assets sold off and all other debts unrecoverable written off?

Reply to
mo
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You can read about Director Disqualification here:

When can disqualification occur? When a company has failed, the O[fficial] R[eceiver] (or I[nsolvency] P[racticioner] in a creditors' voluntary liquidation, an administrative receivership or an administration) has to send the Secretary of State a report on the conduct of all directors who were in office in the last 3 years of the company's trading. The Secretary of State has to decide whether it is in the public interest to seek a disqualification order. Any application is heard and decided by the court.

Examples of conduct which may lead to disqualification include:

continuing to trade to the detriment of creditors at a time when the company was insolvent failure to keep proper accounting records failure to prepare and file accounts or make returns to Companies House

failure to submit tax returns or pay over to the Crown tax or other money due failure to co-operate with the OR/IP.

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Reply to
Troy Steadman

The status of directors loans is most interesting, in practice it may be very hard to recover the debts, see Thakrar v. Ciro Citterio :-

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Reply to
Virgils Ghost

Sorry, this is more relevant :-

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Reply to
Virgils Ghost

Fair enough, but surely there must be times when a business goes down the pan and its not totally the directors fault. Could said Director then go and open more Ltd companies?

Or is it a case of if you mess up one company its game over as a director? :)

Reply to
mo

You can be a director of as many companies as you want to untill and if you get banned/disqualified.

Reply to
Miss L. Toe

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