The insolvency of a company can have wide-ranging implications for its directors and officers.
In particular, when a director or officer of a company knows, or ought to know, that there is no reasonable prospect of the company avoiding insolvent liquidation, advice should be sought as to what steps to take.
Personal liability can be established against a director or officer under various statutory provisions which include wrongful trading, fraudulent trading, breach of trust and misuse of the company name.
It is vitally important that directors and officers are aware of their duties in relation to the company and its creditors and the potential for personal liability.