Can I Get Out of a Personal Guarantee?
Do I have to pay company debts if I have given a personal guarantee?
If you have signed personal guarantees or indemnities to lenders, then the liquidation might end up resulting in the ones called if they return a company's money to the bank. Unfortunately, there is little you can do about it. You should still move forward on a final decision on liquidation, but you may not want to wait in order to avoid a PG being pulled in.
Your UK Limited company's debts could be personally yours.
Just consider what all of the company's debts weighing down your shoulders would do. It's also highly recommended that HMRC rank ahead of floating charge possessors totally in any liquidation since December 2020. Hence, this could lead to lenders that you have guaranteed going to receive less recuperation, thus exposing you to more obligation.
If you have given a personal guarantee to a company, then you are legally responsible for the company's debts. However, there are some exceptions to this rule. If the company is in bankruptcy or receivership, then you may be able to avoid owing any money. Additionally, if the personal guarantee was not set up correctly, or following UK consumer law you may have some wiggle room to walk away without paying.
I've heard that UK company directors can assert additional priority in liquidation.
Company directors in the United Kingdom are able to assert additional priority in liquidation proceedings over the claims of unsecured creditors. This is done by issuing a statutory declaration of solvency, which confirms that the company is solvent and has sufficient assets to meet its liabilities.
The declaration gives the company directors a priority over any other unsecured creditor, up to the value of the company's assets. This can be helpful in ensuring that all of the company's assets are realised in a liquidation and that they are not distributed among unsecured creditors.
Simple & Low Cost Alternative to Liquidation
However, there is a simple and low cost alternative to insolvency for your UK limited company.
You can legitimately sell your business to a third party, along with all the business' debts and liabilities. It's fast, easy and very low cost when compared to liquidation, bankruptcy and insolvency.
