Huge trading loss - how is this viable?? HELP!

[Paul_Rosser]

Aw FFS!! Just when you think you've drawn a line under it - 'last steps' include contacting the ex-director who's still a shareholder to tell her that we've ceased trading, she owes £X amount and would she pay up please.

As always, hubby [one of the other directors] hasn't worked out the final figure yet [still....]!

He is totally hopeless at just getting things dealt with, so my question now is - do we just ask her for her 34% of the overdraft we are all liable for, or do we need to finalise a figure that includes any charges incurred between when we ceased trading and when the account is closed [given that we are now at risk of extra penalties due to going over our overdraft - currently we haven't incurred any extra but the longer this goes on, the more risky it gets]. We just can't seem to finalise what to ask her for and I am fed up of waiting!

But you aren't personally liable for the overdraft, the company is. You have just added a gaurentee that in the event the company can't pay the overdraft off then you will all become liable, usually for the full amount each as then the bank can go after any of you for full payment.

As it stands the other shareholder, unless they have a loan account with the company does not owe anything to the company and personally if I was the shareholder I would be asking to see the companies accounts and records to ascertain where the money went and if it was taken out via one of the other shareholders in an illegal fashion (not declaring dividends correctly etc), then I would be chasing them to pay that back before I parted with a penny.

 

[beasty]

How does a shareholder become liable for an ltd companies overdraft??!

 

[Paul_Rosser]

How does a shareholder become liable for an ltd companies overdraft??!

When they sign a personal guarantee with the bank that in the event the company can't cover it, then they will become personally liable.

 

[nelioneil]

When they sign a personal guarantee with the bank that in the event the company can't cover it, then they will become personally liable.

But the shareholder would have to be a director as well I presume?

 

[UK Contractor Accountant]

Not really- I assume its anyone who has signed a personal guarantee which may include extended family.

 

[beasty]

You would have to be all kinds of stupid to sign a personal guarantee for a company that you are not a director in!

That is about the stupidest thing I ever heard!

 

[UK Contractor Accountant]

Happens a lot with rent guarantees - parent guarantees sons/daughter rental agreement. Have also seen it on ltd co overdraft facilities/borrowings guaranteed by family member.

 

[Paul_Rosser]

But the shareholder would have to be a director as well I presume?

Nope, in this case they used to be a director but you can be a shareholder in a company and not a director.

Doesn't make any difference though, even as a director they are not personally liable for the overdraft until the company is unable to pay it.

 

[Paul_Rosser]

You would have to be all kinds of stupid to sign a personal guarantee for a company that you are not a director in!

That is about the stupidest thing I ever heard!

Read the entire thread, it's a whole load of stupid wrapped up in a stupid bow!

The other shareholder was a director but guessing they resigned due to the way the company was being run.