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Ash, Solicitor
Category: Law
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Experience:  Solicitor with 5+ years experience
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Is a Limited Company Insulated from the Debts of its Directors/Shareholders? I

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Is a Limited Company Insulated from the Debts of its Directors/Shareholders?
I am the sole director and shareholder of a UK limited company. The company is solvent and has assets. It is also currently holding a significant sum of my own money in the form of a director's loan.
I personally am in a far worse situation, having recently lost a very expensive legal case in France. The case cost me all of my personal assets in France (close to one million Euros) and there are still creditors pursuing me for what they claim are outstanding debts.
Given my current predicament, I have chosen to keep as low a profile as possible. I have no personal address or assets in the UK and I am now resident outside the EU (trying to make it difficult for the creditors to find me).
However, I have just received a letter, sent to my company's registered office, from a French bank, giving me a deadline to settle their claimed debt, before they take further action against me. Clearly, they sent the letter to the company's address because they discovered my directorship whilst searching for me (and because they were unable to trace me via other means).
My specific questions are as follows:
[1] Is my company legally protected from my personal debts (including the sum that I have loaned to it)?
[2] Is it sufficient to reply to the letter, emphasizing that the company is a separate legal entity (or is it better to ignore the letter)?
[3] Is there any way, under UK law, that the company's bank balance could be seized or frozen by a debt collector or bailiff (as is commonplace in France)?
Submitted: 1 year ago.
Category: Law
Expert:  Ash replied 1 year ago.
Hello my name is ***** ***** I will help you with this.
1) Your Limited Company is classed as different legal entity than you. Therefore any debts you owe are entirely separate from you as a person.
2) I would ignore it. They will know you and the Company are separate
3) No. There is NO DEBT is the Company name. All they could do is seek an order controlling your shares and having a charge on them. That means if and when you came to sell them, they would be paid out first.
Can I clarify anything for you about this today please?
Customer: replied 1 year ago.

Hello Alex,

Many thanks for your prompt and very clear answers to my questions.

Is there anything you would advise me to do as a precautionary measure at this time?

Please keep in mind that the only personal assets that I have left are now effectively stored in the company's bank account, purely as an attempt at protecting them. Having seen my French bank account emptied, without warning, I am nervous about the same thing happening again. Can you assure me that this is impossible under UK law? Am I right to assume that any action against the company must be taken in a UK court?

Also, can you please confirm your credentials? Are you a qualified solicitor? If so, are you available, if it should become necessary, to represent me (or is that against the rules of JustAnswer)?

Expert:  Ash replied 1 year ago.
I am a qualified Solicitor in England. Sadly I can't represent you as it is against site rules.
In the UK they can empty your PERSONAL account but not Company account. They can't touch anything which belongs to the Company.
Anything in the UK must be taken by UK Courts.
Does that help?
Ash and 3 other Law Specialists are ready to help you
Expert:  Ash replied 1 year ago.

I am just following up to see if there is anything else I can help with?

If you have not done so already might I ask you to rate my answer before you go today please, the button should be at the bottom of the screen.

If you need more help please click reply.