What are my Responsibilities as a Director?
As a company director, you have responsibilities to your company, its shareholders, and creditors. But should your company become insolvent, your responsibilities as a director change.
What is an Insolvent Company?
If your company can’t pay its debts on time, has a greater value of liabilities than it does assets and hasn’t got a viable future financially, your company is insolvent.
What are My Responsibilities when Insolvent?
- Seek professional advice
- You must act in the best interest of your creditors
- Resigning from your company is not an option
- Don’t take any further credit
- Pay cash on delivery
- Treat all creditors equally
- Don’t sell or dispose of assets at an undervalue
- You must keep the company’s books and records
If you’re a director of a company that’s gone into liquidation, you may be able to claim redundancy pay. And could also be entitled to any wages or holiday pay owed. Should your claim be successful, you’ll be paid by the government’s Redundancy Payments service.
