Why fight to save a limited liability company – surely I’m protected?

Why fight to save a limited liability company – surely I’m protected?

Many of my clients don’t see the point in fighting to save a limited liability company, assuming that they’ll lose any assets to the Liquidator but will be personally unaffected.

Unfortunately, this isn’t the case. There are two main areas of a liquidation that can, and often will, affect the shareholders and/or Directors personally in a Liquidation.

Directors can be held accountable for ‘Breaches of Director’s Duties’ and shareholders can be liable for any drawings taken from the business without having tax taken at source – what is known as an Overdrawn Shareholders’ Current account.

Many times, it is far better to try and negotiate a payment arrangement with IRD, save the company and wind it up naturally, rather than allow a preferred creditor’s liquidator to target you personally for your company’s loss. Often, the debt owed by the company is less than what the liquidators will demand from you personally for drawings or breaches.

Protect yourself and your business, call Rosie today on 0800 829 277.

By Rosie Gallagher

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