Company Law
Can a Director Be Personally Liable for Company Debts?
Separate personality, personal guarantees, wrongful conduct and statutory liability.
The company normally owes its own debts
A duly incorporated company is separate from its directors and members. Signing for it does not alone make a director the debtor. Identify capacity, authority and the contractual party. Insolvency is not by itself automatic personal liability.
Personal liability needs a distinct basis
A personal guarantee, an individual civil wrong, fraud or a specific statutory obligation may provide a separate basis. Disregarding corporate personality is exceptional. Sole control does not itself justify liability for every debt.
Examine the particular transaction
Review loans, guarantees, contracts, resolutions and payments together. Distinguish directors from members. A personal claim should identify the act and the specific debt or loss attributed to the individual.
This publication is for general information and does not constitute legal advice on a particular matter. Legislation and case law may change. Seek legal assistance promptly, especially where a court or application deadline may apply.