Company strike-off

Philm_12

Simple question? Or not?

If a company has been "struck off", do the individual directors become responsible for the company's liabilities?

RedXIV

Philm_12 wrote: »

Simple question? Or not?

If a company has been "struck off", do the individual directors become responsible for the company's liabilities?

if its a limited company, it can't really be struck off until all the company's assets/liabilities have been settled as much as possible. But the point of a limited company is that all ownership of assets and liabilities belong to the company rather than any individuals. So if your company HAS been struck off, the directors should be free from any obligations

Tom Young

Companies can be struck off under a fair few circumstances!

Philm_12

RedXIV wrote: »

Philm_12 wrote: »

Simple question? Or not?

If a company has been "struck off", do the individual directors become responsible for the company's liabilities?

if its a limited company, it can't really be struck off until all the company's assets/liabilities have been settled as much as possible. But the point of a limited company is that all ownership of assets and liabilities belong to the company rather than any individuals. So if your company HAS been struck off, the directors should be free from any obligations

It's not my company but I was hoping that I could go after the directors as I consider them to have been negligent in their duties. Unfortunately, it appears that they can stroll off into the sunset - free from any obligations!

Thank you for the reply,RedXIV

Marcusm

Philm_12 wrote: »

It's not my company but I was hoping that I could go after the directors as I consider them to have been negligent in their duties. Unfortunately, it appears that they can stroll off into the sunset - free from any obligations!

Thank you for the reply,RedXIV

If you feel you have a cause of action against the company, you can apply for it to be reinstated to the register. Strike off is not a dissolution, the company still exists in a state of limbo. If your action is successful you might consider pursuing a reckless trading or trading while insolvent action which may have personal consequences for the directors. None of these would be inexpensive options.

hession.law

Directors may be held personal liable for the debts of the company if at the time they incurred the debt;

1) The company was insolvent and they knew or were reckless to the fact. This is fraudulent trading.
2) If the company was about to go into insolvent liquidation and the directors did not take the necessary steps to minimise the loss to creditors.

shaneybaby

hession.law wrote: »

Directors may be held personal liable for the debts of the company if at the time they incurred the debt;

1) The company was insolvent and they knew or were reckless to the fact. This is fraudulent trading.
2) If the company was about to go into insolvent liquidation and the directors did not take the necessary steps to minimise the loss to creditors.

And also under Section 46 of the Companies (Amendment) (No 2) Act 1999. Where a company is struck off for failure to file returns. That amends 12(B) (4) of the 1982 act whereby the Revenue can go after such a companies directors for tax debt incurred when it was struck off (but still trading). Liquidation enables a company to be dissolved in some sort of decent fashion, strike offs can have loads of wonderful hidden traps;)

shaneybaby

Marcusm wrote: »

If you feel you have a cause of action against the company, you can apply for it to be reinstated to the register. Strike off is not a dissolution, the company still exists in a state of limbo. If your action is successful you might consider pursuing a reckless trading or trading while insolvent action which may have personal consequences for the directors. None of these would be inexpensive options.

And helpfully in the circuit court ! (if you're a creditor, hell of a lot cheaper)

Delancey

I understood that when a company was struck off that its directors ceased to enjoy the protection of limited liability. In otherwords , if they continue to trade then they may he held personally liable ?

Tom Young

shaneybaby wrote: »

And helpfully in the circuit court ! (if you're a creditor, hell of a lot cheaper)

Correct, though the proofs are a pain in the hole.

Philm_12

Delancey wrote: »

I understood that when a company was struck off that its directors ceased to enjoy the protection of limited liability. In otherwords , if they continue to trade then they may he held personally liable ?

Interesting post - that is what I thought too. It makes sense to me - if a company is struck off, why shouldn't the directors be exposed for personal liability? They have not operated by the rules of the CRO, therefore they should be personally liable for their carelessness or intentional fraud.

Thanks for that, Delancy.