Directors: Here’s How to Avoid Being Sued for Company Debts
“To be prepared is half the victory.” (Miguel de Cervantes, author of Don Quixote) Perhaps you’re a director losing sleep over the risk of losing everything if creditors sue you personally for your company’s debts because you’re asset-rich, and they can’t squeeze anything out of the company. Or maybe you worry about the company itself […]
Now Creditors Can Apply for Directors to be Declared Delinquent – Why is That Important?
“He who is quick to borrow is slow to pay” (Old proverb) A recent High Court decision means that, for the first time, creditors of debtor companies are specifically cleared to apply for the company’s directors to be declared “delinquent” in certain circumstances. And that has significant implications for both directors and creditors. For directors […]
Why You Need a Shareholders’ Agreement, and How to Structure It
Whether you are forming a new company or buying shares in an existing one, a formal shareholders’ agreement, tailored to suit your particular situation and needs, is essential. What is a shareholders’ agreement? It’s a contract between shareholders outlining the rights, responsibilities, and obligations of each shareholder, it provides a framework for the governance of […]
Directors – When Are They Personally Liable?
“… for the benefit of immunity from liability for its debts, those running the corporation may not use its formal identity to incur obligations recklessly, grossly negligently or fraudulently. If they do, they risk being made personally liable.” (Quoted in the judgment below) Particularly in hard times, it is not at all uncommon to find […]