Do directors have to pay company debts?
General
Are directors personally liable for company debts?
In most cases, no. A limited company is a separate legal entity.
When liability can arise
Directors may become personally liable if:
- They give personal guarantees
- They trade while insolvent
- They engage in wrongful or fraudulent trading
What directors should do
- Understand financial position early
- Avoid worsening creditor position
- Take professional advice
Related guidance
- /guides/directors-duties-insolvency
- /guides/wrongful-trading