Content
Brave New World
Business Not Pleasure
Summertime Blues
All That Glitters...
Casting The Net
Trust Gordon?
It Ain't Over...
One In The Eye
Keep Your Nose Clean
Foreign Affairs
When Is A Car...
Don't Walk Away
Avoiding, The Issue
Brown Is Anti-PC
VAT's Up Doc?
Fuel's Gold
An Age-old Question?
That's Unfair!
Year In Year Out
How Hard To Try?
It's A Rip-Off!
Outlaws Win
Show Some Restraint
Not Our Problem
They Cannot Be Serious?
Merry-Go-Round
Pension Disappointments
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One of the reasons for trading through a company is that the owners are not personally liable for the company's debts - if the company goes bust, you can dust yourself down and start again. You are not personally bankrupted. Of course, some people have used this over the years for shady business dealings - "phoenix" companies which disappear owing money and then reappear with similar names, similar owners and directors, and similar behaviour. But for genuine entrepreneurs, it is a relief to be protected from some of the risks that might otherwise put most people off going into business at all. It's important to be aware that there are limitations on walking away from the company's debts. If you carry on trading when you know that the creditors won't be paid, you become personally liable for the losses they incur. Another example came up in a recent case. There is a specific rule that the National Insurance Contributions payable by a company can become the personal responsibility of any officer of the company whose "fraud or neglect" leads to them not being paid to the Revenue. A man ran a company with a payroll of £1.5m over a six month period, but no bank account. It went into liquidation, and NICs of over £200,000 were unpaid. The Appeal Commissioners agreed with HMRC that the director's running of the company - not paying any NICs month after month, even though he knew they were due - was so imprudent that the law was triggered. He would have to pay. It's always important to understand what your responsibilities are as a director of a company. If you want to discuss them, we will be happy to help. |
© Bayar Hughes & Co., 2010.