If I am a director of a CLG and we took out a judicial recview and lost say 40000. If the CLG only has 5000, do the directors have to pay the rest from their own money or can the company fold and the directors not be liable?
That’s precisely the effect of limited liability except where the veil of incorporation can be pierced. Are they the costs of your own advisers? Surprised that they would not look for security for their own costs in advance.
I think you are saying I would not be liable but but I might not get a judicial review if the funds did not exist.
You will not be personally liable for debts of the CLG, but did you provide any personal undertaking to your legal advisers to cover their costs should the company be unable to do so? That wouldn’t be uncommon.
I am just thinking ahead, thanks for the info.
As a director, you shouldn't cause the company to incur liabilities that you know or should know that it cannot meet. That's precisely the kind of behaviour that will lead to a court allowing the company's creditors to pursue you personally.
The bar for that is quite high though.
Oh, sure. But it's something the OP would want to consider. The OP is clearly contemplating a scenario in which the company may become insolvent.
