Where a company is found to be insolvent, there may be questions as to whether or not the directors knew or ought to have realised that the company was in such as position that the company couldn’t pay their debts as they fall due.
Where it is found that the company directors knew or ought to have realised that the company was unlikely to avoid insolvent liquidation but continued to trade, the directors may face personal liability for the company debts for wrongful trading.
A director may have a defence to a claim of wrongful trading, if on knowing that there was no reasonable prospect that the company would avoid going into insolvent liquidation or insolvent administration, that the director took every step with a view to minimising the potential loss to the company's creditors as they ought to have taken.
Given the risk to directors, it is critical that directors seek advice at the earliest opportunity where there are, or may, concerns about the solvency of the company.
This makes it essential that as a director you have properly documented all the steps when your company faces the threat of insolvency. We have experience of representing directors when their interests are different from the company, or where proceedings have been threatened or taken against them personally.
Our expert team understands the complexities and challenges when proceedings involve serious allegations such fraud. This can be a frightening prospect for any director. Our advice is don’t give up. At Altion Law we are experienced negotiators who will fight your corner and take the stress out of your situation. Our lawyers have a proven track record of negotiating mutually agreeable deals with creditors, including HMRC.
At Altion Law we can also help by advising you from the outset on best practice and compliance procedures. We can provide clear, jargon-free explanations of directors and officers liabilities and compliance procedures and review all your existing procedures and processes to avoid future problems. To speak to a solicitor who specialises in wrongful trading and directors liabilities cases, please contact us.