How does Limited Liability affect in this scenario?

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Cougar100

  • #1
    If a UK citizen was to create a Private Limited Company by Shares to operate a business where he/she was the sole employee and another company was to sue, would the PERSONAL assets of the director be affected IN ANY WAY?

    For example, setup an ISP and be sued for copyright infringement, lose and have judge award damages of £2 million, could the director's personal assets be siezed? What if the director also owned other companies?

    Yes I'm aware of director liable if he commits fraud in the name of the company, etc. but this is a different issue such as IP/trademark/copyright/patent laws.

    PS. the example of ISP/copyright infringment is just that, an example.
     
    Rufford

    Rufford

    Free Member
    Jul 3, 2008
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    Rufford
  • #2
    Cougar100 said:
    If a UK citizen was to create a Private Limited Company by Shares to operate a business where he/she was the sole employee and another company was to sue, would the PERSONAL assets of the director be affected IN ANY WAY?

    For example, setup an ISP and be sued for copyright infringement, lose and have judge award damages of £2 million, could the director's personal assets be siezed? What if the director also owned other companies?

    Yes I'm aware of director liable if he commits fraud in the name of the company, etc. but this is a different issue such as IP/trademark/copyright/patent laws.

    PS. the example of ISP/copyright infringment is just that, an example.
    Click to expand...

    It is the company whos is acting not the Shareholder - answer NO
     
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    M-C Hoare

  • #4
    I assume that the person is not only the sole employee but also the sole shareholder and director? If so, save for the few circumstances where the courts will lift the veil of incorporation (fraud, knowingly trading illegally, trading while knowingly insolvent, using a the same name for a phoenix co to name a few) there are no circumstances that I know where personal liability will attach in the above senario.
    But if you need specific advice on the actual situation, let me know.
    Marie
     
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    LIVERPOOL

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    Oct 25, 2007
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  • #5
    Can a Company Secretary be sued personally where a claim for negligence is not covered by the insurance policy ie the claim was made after the company stopped trading and the insurance policy had expired. The terms of the policy were any claim must have startedduring the policys lifetime
     
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    mahutchinson

  • #6
    A company secretary could in theory be personally sued but the circumstances would be very unusual. This could be after the company has stopped trading or is even dissolved but would have to be an extreme situation of wrongdoing as in most cases the directors would be responsible. I assume that you're talking about PI insurance.
     
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    LIVERPOOL

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    Oct 25, 2007
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  • #7
    Yes i am. In theory there has been no wrong doing as the company had insurance cover whilst trading but the terms of the policy stated any claim must have been notified during the term of the policy and not after. That could hardly be classed as negligence but the client has a no win/nofee solicitor who is coming after me as i have more assets than the director. I do not want the expense of defending the claim, but dont wish to settle(approx 4k) as i dont think ive done anything wrong. It sounds like i have a reasonable case against my personal liability
     
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