A directors responsibilities are to the company, its shareholders and to its creditors. They must act fairly in the interests of these at all times. However, if a company becomes or may become insolvent then the directors responsibilities change.
Directors key responsibilities when insolvent:
Act in the best interest of creditors generally
Resignation is not an option
Do not take further credit
Pay cash on delivery
Treat all creditors equally
Do not pay one creditor in preference to another
Do not sell or dispose of assets at an undervalue
Preserve the company’s Books and Records
Seek professional advice
Preserve the company’s bank account
Do not repay your loans
These are just a few examples of the key issues and there are many more things to consider. Contact us on 0330 159 8080 now for free advice and support from one of our team.