Directors’ Duties

Insolvency

When a company is facing financial difficulty its directors must also consider the interests of the company’s creditors.  Failure to do so can lead to the directors incurring personal liability for wrongful trading or misfeasance.  In order to guard against such a possibility directors of companies in financial trouble should consider the following steps. 

• Take professional advice
• Keep the company’s financial position under constant review
• Make realistic projections
• Document all decisions, particularly for small companies where management is usually less formal
• Liaise with key creditors
• Consider possible alternatives to liquidation, such as a company voluntary arrangement

We can help directors faced with such issues.