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UKSolicitorJA
UKSolicitorJA, Solicitor
Category: Law
Satisfied Customers: 4312
Experience:  English solicitor with over 12 years experience
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Hi Jo, Thanks for your answers the other day. My next

Resolved Question:

Hi Jo,

Thanks for your answers the other day.

My next question is, i was in a relationship with a lady who is now deceased. Before she died she gave my company an amount of £50,000 as a loan but my company is no more in business. I have asked th companies house to strike in out inceit has not been tradingfor the past 1 year. Her family have gone to court demanding the money from me even though the money was paid to a company that i was a Director.
My question is can i be held personally for the loan even when the money was paid to a compny?

Thank you.
Ekow.
Submitted: 3 years ago.
Category: Law
Expert:  UKSolicitorJA replied 3 years ago.
Hello,

Thank you for your question.

What was the money given for, when was it given and on what grounds are they claiming the money from you personally?
Customer: replied 3 years ago.

 


Hi ,


 


The money was given as a loan to the company. It was given in September 2012 just before she died.


 


They are claiming the money from me on the grounds that I was the Director or owner of the company that the loan was given to.


 


Thank you.


 


Kind regards,


Ekow

Expert:  UKSolicitorJA replied 3 years ago.
Thank you.

The company is a separate legal entity from you and normally you are not liable personally for debts owing by the company on the grounds that you are a director or a shareholder.

However, there are instances when courts lift or pierce the corporate veil and hold directors personally liable for the company's debts if there has been wrongful or fraudulent trading, and the following tests apply

There should be evidence of impropriety which must be linked to avoidance or concealment of a liability through the use of the company structure.
The wrongdoer’s intentions may be considered, but in any case it must be shown that they controlled the company and used it as a facade to conceal their wrongdoing.
Whether or not the company was incorporated with deceptive intent, the courts will want to see that it was being used as a facade at the time of the relevant transaction(s) and a remedy will only be provided in respect of the particular wrong that has been committed.
In order to show that a corporate structure has been used as a device to conceal impropriety, the impropriety must first be identified to the court.

So, unless they can show that you misused the corporate structure, the courts will not grant judgement against you personally
You may read more on this here

http://incelaw.com/ourknowledge/publications/piercing-the-corporate-veil-supreme-court-clarifies-the-english-law-position

Hope this helps
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