It is possible to identify if a company is under creditor pressure to repay its debts.
If creditors are threatening to take legal action against the company or have already instructed a debt collection agency to act on its behalf, a company will usually be in financial difficulty.
Should the company not pay its debts or engage with its creditors then this may lead to legal action being taken against the company resulting in a County Court Judgment being registered or a Statutory Demand / Winding Up Petition being served and the company eventually being placed into liquidation.
When a company is in financial distress then every creditor will want to be paid first and you may find that the most aggressive creditors take action fast and first in order to be paid. Steps need to be taken quickly to avoid costs escalating. MyBusinessSupport can assist you in finding solutions to these issues.
Creditors cannot pursue personally the company directors providing that the contract was in the name of the company unless of course a Personal Guarantee was provided.
Directors should be aware that there are instances which can result in the Directors being personally liable. These are:
• 1. If the Director has signed a personal guarantee undertaking to pay the debts if the company fails to do so
• 2. If there is evidence of misconduct or wrongful trading by the Director.
Both are serious issues, and we suggest you obtain expert advice as soon as possible.
For support on this issue please contact one of our experts at MyBusinessSupport.
