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Tuesday, 04 September 2012 14:38

What Happens To A Director If A LTD Company Goes Bust?

Written by  Jon
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What happens to the director if limited company goes bankrupt? Will this affect personal credit rating or prevent from establishing new limited company under different name?

Answer:  Limited companies do not go bankrupt, they may go into administration and liquidation/receivership, but bankruptcy is fo individuals.


If a LTD company goes bust, it does not affect the Director unless they have guaranteed or co-signed for any of the company's debts.  If so, then the Director is now fully responsible for those debts. This does not mean they cannot set-up a new company, but if the Director needs to go bankrupt, as a bankrupt they cannot be a Director of a LTD company.  They can be self-employed and trade as a sole trader, but not a Director.





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