Personal Liability for Company Directors in Liquidations

Amplify’d from businessandlegal.ie

Company directors can be held personally liable for the debts of the company in exceptional circumstances. Fraudulent trading This would occur if a director carried on business with the intent to defraud but the intent to defraud must be proven. This is known as fraudulent trading. Reckless trading Reckless trading can also lead to personal liability for directors. Reckless trading is where a director is knowingly a party to the carrying on of any business of the company in a reckless manner. The most common occurrence of reckless trading is where it can be shown that the directors have permitted the company to incur liabilities without having reasonable grounds to believe that those debts would be paid. Failure to keep proper books of account is another offence that can lead to personal liability but if the director can show that he took reasonable steps or appointed another competent and reliable person to keep the company accounts he can avoid liability. Consequences for directors of an insolvent liquidation Read more at businessandlegal.ie

 

See this Amp at http://amplify.com/u/a1g8hj