Millgaet gets £250,000 from trust

[EM]

If you are a shareholder director of a company and it goes into liquidation owing money, aren't you personally liable for the debts?

Nope. That is what the "Limited" in "Limited Liability Company" means.

[MJ]

seem to remember it being "company limited by guarantee". Should you be a director you're usually only liable for £1.

[icepick239]

If you are a shareholder director of a company and it goes into liquidation owing money, aren't you personally liable for the debts?

Nope. That is what the Limited in Limited Liability Company means.

seem to remember it being company limited by guarantee. Should you be a director you're usually only liable for £1.

 

That is a bit of a misconception.

If the Business Owners/Directors have ever committed any criminal malfeasance or fraud involving their operation of the business, there is no way they will escape full liability in the event of a business crash.

 

In another situation and in the absence of any Personal Guarantees signed by the Owners/Directors, they would indeed be able to walk away with only minimal liability, only of course if the business suffered its collapse through adverse business conditions and no criminality was involved.

 

In many cases therefore, a Personal Guarantee is sought or insisted-on as a condition by any Lender, prior to offering finance.

 

I wonder, does SLAP follow this rule and ask for PG's or do they sometime operate as Lenders of last resort.

[MuckleJoannie]

This article implies that the investment was in shares.

Described as a “commercial investment†in the business, the trust’s backing of Millgaet means it will gain a “substantial minority interest†in the new organisation.

 

As a condition of the cash boost it will hold a director’s position in the company.

 

Trustee Bobby Hunter has been voted on as co-director, and will assist Millgaet with its future plans.

 

Trust financial controller Neil MacDougall said the investment was being made as part of a 10 year arrangement, through which the trust expects to make a commercial rate of dividend on an annual basis.

 

This means SLAP is co-owner of Millgaet and as such would not seek any financial guarantee from the other owners, other than that the business was as described when they bought in.