Attention: Company Directors:
Are you you trading whilst knowingly insolvent?
What is the definition of ‘insolvent’
You as a directors have considerable duties, which can change depending on the financial health of the company.
Under the provisions of the Companies Act 2006, Directors have a duty to act in good faith to promote the success of the company for the benefit of its shareholders.
However, if the company starts to experience financial difficulties, the directors’ duties are modified by a duty to act in the interests of its creditors rather than its members.
Continuing to trade whilst insolvent is not illegal, but carries considerable risk. This means that directors can become guilty of an insolvency offence including, but not limited to, wrongful trading.
Other offences include fraudulent trading, preferences, transactions at undervalue and misfeasance.
For advice and guidance on how to protect your position as a director and avoid personal liability please call us on our freephone number 0808 168 7540