If your business is suffering for any of the following problems:

  • cash flow
  • inability to pay bills
  • more liabilities than assets
  • customers who wont pay

Then your business might be at the stage of distress or insolvency, at this point it is a good idea to speak to a Business Turnaround UK professional as soon as possible.

As a Director you can also be held personally liable for your actions and the actions of the business as a whole. This is why it is important to protect yourself in the event of insolvency.

How to protect yourself against personal liability

To protect yourself against personally liability, you first need to understand what responsibilities your role as a Director involves. You need to fully understand what actions you can and can not legally take when you are insolvent.

When a business goes into administration or liquidation, a director’s conduct may be investigated and you could be held personally liable for:

  • Wrongful trading – this is if you continue to trade and create debts that you know you will be unable to pay
  • Fraudulent trading – for example giving correct information in order to obtain orders or credit and taking orders that you know you will be unable to fulfill
  • Misfeasance- if you use company money to pay for no business related items
  • Personal guarantees- if you have given a personal guarantee for a loan, the creditors can request you to repay it if the business cant.
  • Preferences – if you business is insolvent and you pay one creditor in preference to another you could be held personally liable as you are under a duty to treat all creditors equally.
  • Transactions at an undervalue – if the business transfers assets for a lot less than their market value

The role of a Business Turnaround UK Specialists

A business turnaround UK specialist will be able to give you an objective view on your business situation and they may offer solutions that you have never considered before. Whilst this can be very distressing for you, business turnaround specialists are experts in this field and will have a wealth of experience. They can also often identify the root cause of the problems that your business is experiencing, whilst helping you obtain the injection of cash that you need.

To understand the whole range of options and to get help choosing the right one for your business contact us on 0800 597 4757 or enquire online using the form opposite.