If you are reading this then you are obviously considering your options.
Please be aware of the following if you are at risk of trading insolvently.
If you are unsure of you`re position we can get you an expert opinion 01744 333001 or 01925 506027 for more information at anytime.
If a company becomes insolvent, the directors have to take particular care.
Under UK law, trading while insolvent can trigger several provisions under the Insolvency Act 1986 which may have the effect of making directors of a company personally liable to contribute to the assets of a company.
The relevant provisions of the Insolvency Act 1986 include:
- Wrongful trading – Section 214
- Transaction at an undervalue – Section 238
- Preferences – Section 239
- Extortionate credit transactions – Section 244
Under wrongful trading legislation in the UK, if the company continues to trade while it is insolvent the directors of the company may become personally liable to contribute to the company’s assets and help meet the deficit to unsecured creditors if the company’s financial position is made worse by the directors continuing to trade instead of putting the company immediately into liquidation.
If you belive you may be risking personal liability doing nothing is not really an option contact Emerald today on 01744 333001 or 01925 506027 to review your situation.