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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3671
Experience:  Solicitors 2 years plus PQE
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There are two companies using the same office doing the same

Customer Question

There are two companies using the same office doing the same business and sharing some resorces,each produce seperate accounts, they have a seperate board of directors, one of the companies has accumulated some debt. Will the solvent company,or their directors be liable in any way for the debt.
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.

Hi, Thank you for your question and welcome. Limited companies are separate legal entities. They cannot be liable for one another's debts unless they accept liability in writing - i.e by corporate guarantee. The solvent company will not be responsible for insolvent company debts and neither will its directors on the face of it. However to minimise business disruption, I would make sure that you have evidence to show the companies are clearly separate - I.e board minutes etc. I would also make clear and label (and show proof of purchase) which assets belong to which company. When a liquidator is appointed it will likely try and take everything it can lay its hands on. If the companies share an office, are they both liable under the same lease? Kind regards AJ

Customer: replied 2 years ago.

Thank you --good advice!

Expert:  Alex J. replied 2 years ago.
Hi,
No problem.
Please do not hesitate to contact me if I can assist any further.
Any feedback is gratefully received.
Kind regards
AJ