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A company and its debts

  • 16-02-2018 6:05am
    #1
    Corned Beef Sandwich
    Closed Accounts Posts: 21 ✭


    Say A is the sole owner and director of a company. The company is no longer trading and is removed from the register. However, the company still has debts and A has given a personal guarantee on those debts.

    If A is declared bankrupted, and the company is removed from the register, can creditors pursue those debts in any capacity?


Comments

  • #2
    Peregrinus
    Registered Users, Registered Users 2 Posts: 26,987 ✭✭✭✭Peregrinus


    Corned Beef Sandwich wrote: »
    Say A is the sole owner and director of a company. The company is no longer trading and is removed from the register. However, the company still has debts and A has given a personal guarantee on those debts.

    If A is declared bankrupted, and the company is removed from the register, can creditors pursue those debts in any capacity?
    Yes, they can claim in A's bankruptcy; they are creditors because he has guaranteed debts which have not been paid. Of course, as A is bankrupt, they'll have to share whatever is available with his other creditors.

    There's also a possiblity that, despite not trading and having been removed from the register, the company still has or can claim assets, in which case creditors of the company could petition to have it restored to the register so that it can be wound up, and its assets applied in satisfaction of its liablities to creditors. But this only works if the company has assets.


  • #3
    Corned Beef Sandwich
    Closed Accounts Posts: 21 ✭Corned Beef Sandwich


    To be clear, if a company is removed from the register, any debts it owed are no longer enforceable?


  • #4
    Peregrinus
    Registered Users, Registered Users 2 Posts: 26,987 ✭✭✭✭Peregrinus


    No, they are enforceable, but in order to enforce them against the company you would first of all have to go to court to get the company restored to the register. That's a pretty straightforward procedure, but of course there is no point to it unless the restored company would have some assets.

    Separately, if you have a personal guarantee of the company's indebtedness from an individual, can you enforce that against the individual if the company has been struck off the register, without getting the company restored? Yes, you can, but again there may be no point in doing so unless the individual is worth suing.


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