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Limited company protection

  • 15-07-2007 2:43pm
    #1
    HQ2006
    Closed Accounts Posts: 1 ✭


    If a limited company has to fold due to bankruptcy what protection do the directors have for their personal bank accounts? Can the money in these be touched to pay debtors or is it only the company bank account that's effected?
    Thanks:confused:


Comments

  • #2
    Our man in Havana
    Closed Accounts Posts: 29,473 ✭✭✭✭Our man in Havana


    The company is only liable for the company debts and the directors are not personally liable unless they gave personal gaurantees to lenders for company debts.


  • #3
    boomer_ie
    Closed Accounts Posts: 392 ✭✭boomer_ie


    Just as a sub question of this, can a bank link your personal account with your business account, every time i come into the bank on business account lodgings / withdrawls the manager comes out to me EVERY time relating to my personal account.

    (We are in dispute over DD and SO not being cancelled and the €10 charge being charged every time which balooned to €1400 and I never recieved any statments so have asked them to post out statments which never arrived...)

    The worrying thing is that on Friday just gone I got the impression from the manager that he was going to refuse to allow me to make withdrawals from my business account until the personal account issue was sorted out.

    Anyone got any advice?

    Shane


  • #4
    Our man in Havana
    Closed Accounts Posts: 29,473 ✭✭✭✭Our man in Havana


    Your business account has nothing to do with your personal account hence they are separate. I don't think they can freeze your business account for an issue on the personal account.


  • #5
    PRman
    Registered Users, Registered Users 2 Posts: 269 ✭✭PRman


    Yeah I'd be very surprised if they're allowed do that. your company is a seperate legal entity from you as an individual. The other way around they might be able to do if you gave a personal guarantee on the busness account....


  • #6
    dublinlawyer
    Closed Accounts Posts: 43 ✭dublinlawyer


    Generally the member of the company (shareholder) is only liable for the extent of the shares paid up (usually in a small company there might be one one euro shares for each director).
    A director can be made personally liable by a court for debts of the company if they act fradulently (dishonestly) or recklessly. In the latter case it is a defence to show you acted reasonably and honestly. An example of reckless trading would be incurring debts knowing that the company would not be able to honour or was not likely to be able to honour them - so when the balance sheet shows greater liabilities than assets stop ordering goods or incurring further liabilities.


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