Corporate Debt
Directors Obligations

Directors Obligations

Directors of a Company facing financial difficulty have a number of obligations over and above those of other trading companies.

The main obligations can be summed up as follows:

  • Preserve the Company assets
  • Do not worsen the position
  • Treat all creditors equally, do not pay some in preference to others
  • Do not sell assets for less than they are worth
  • Do not take further credit (pay on delivery for vital supplies)

Whilst this is not an exhaustive list, following these steps may help protect Directors from wrongful trading (continuing to trade when they know the Company cannot avoid insolvency) which may render them personally liable.

Directors should note that, at this stage, resignation is not an option and that they should seek professional advice as soon as possible.

For a free, confidential consultation, call Currie Young on 01782 394500

01782 394500