Statutory Demand served on an individual: What to do next
What do we mean by statutory demand? A statutory demand is a formal ask for payment from a creditor to a person or business. Even though there’s no need for court action to send this demand, it’s a significant move. If you get one, you mustn’t just overlook it. Statutory demands usually come before legal […]
What is the difference between a preferential and a non-preferential creditor?
Where do preferential and non-preferential creditors rank in the creditor hierarchy? In the creditor hierarchy, preferential creditors hold the highest position for payment during company liquidation, including fixed-charge holders. Following them are non-preferential creditors, who are placed lower in priority. What are the different types of company creditors? In simple terms, a creditor is anyone, […]
What are Unlawful Dividends?
Understanding unlawful dividends Unlawful dividends happen when cash is taken out from a limited company without enough profits to support it. Shareholders who receive such dividends might need to give back the money if they know the company can’t afford to pay it out. Alternatively, directors might have to repay not only their own but […]
What happens after you have signed a lease guarantee?
What happens if you breach a guarantee in a commercial lease? A commercial lease guarantee means you promise your landlord to follow the lease rules and pay your rent. If you break the agreement or can’t afford your commercial property rent, the landlord can use the guarantee. Then, your guarantor has to pay. What […]
Can I take money out of an insolvent limited company?
Can I take money from an insolvent company? If your business is facing financial trouble, you should stop trading right away. Keep all company funds and use them to pay back creditors. If your business can’t pay its debts and you take money out, you might get fined, become personally responsible for the debts, or […]
What is the difference between secured and unsecured creditors?
What is the difference between secured and unsecured creditors? When a company goes into liquidation, it sells all its assets. The money earned is used to pay off the debts. If a company is insolvent, it doesn’t have enough money to pay all its creditors fully. So, some creditors may not get paid what they’re […]
Investing Personal Money into a Company: Advice for Directors
Understanding the risks of using personal money to pay company debts If you use your own money to pay off company debts and improve cash flow, the risks depend on how your business is set up. As a sole trader, you’re personally responsible for business debts. However, if you run a limited company, you’re generally […]
How company debts could affect your partner
Do I need to repay my partner’s company debts? If your partner’s business faces debt issues, you might be responsible for its debts if the business account was opened jointly and both of you signed the loan agreement. However, if the account wasn’t opened jointly, you aren’t liable for your partner’s business debts. Does […]
Advice for unregulated finance brokers facing financial penalties
Advice for unregulated finance brokers facing financial penalties Finance brokers without regulation are facing more legal challenges about deals they arranged years ago. This legal action involves claims of wrongly selling various financial products, from personal options like bridging loans and mortgages to business borrowings such as loans and asset-based lending. Some people think this […]
Understanding Liability for Accountant Mistakes and Poor Advice
Who is liable for accountant mistakes? As a director of a limited company, it’s your duty to provide accurate details to HMRC, even if you hire an accountant to assist you. If HMRC receives incorrect information, your company may face fees or charges, regardless of whether it was your accountant’s error. Who will be if […]