What is the director personally liable for during company insolvency?
If you are a director with a struggling business, it is important to know how your company insolvency may affect you personally. You should be aware of the situations in which you may be personally liable for certain company debts. Read below to find out what they are.
If you provided any personal guarantees will you be personally liable to the creditor who you provided the guarantee too. You may have been asked to provide a personal guarantee when you opened a trade credit account, secured bank loans, or signed a premises lease.
Director’s Penalty Notices
If your company has unpaid or unreported PAYG or superannuation debts, you can be issued with a Director’s Penalty Notice by the ATO. You could become be personally liable for these debts.
3) Insolvent Trading
An insolvent trading claim can be brought against you personally if your company continues to incur debts whilst it is facing insolvency. It is important to note the warning signs of insolvency, which we have detailed here.
Deciding on the next step for your insolvent company can be very stressful. The additional situations in which you may be personally liable for certain company debts makes this even more difficult. However, you can always contact a professional insolvency specialists to discuss your option. Call our toll-free hotline on 1800 003 883.