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JGM
JGM, Solicitor
Category: Law
Satisfied Customers: 11554
Experience:  30 years as a practising solicitor.
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Can a director of a Ltd company be sued completion

Resolved Question:

Can a director of a Ltd company be sued for non completion of a share purchase rather than his company which has no asserts.
Submitted: 1 year ago.
Category: Law
Expert:  JGM replied 1 year ago.
If the company is in breach of a share puchase agreement then the director is not personally liable for that breach unless the director has personally guaranteed the undertakings of the company under the SPA. Apart from that the company is liable and if the company has no assets then the vendor under the SPA really has no remedy.
Customer: replied 1 year ago.
What if that person carried out the dealings all along for 6 months and then created a special purpose vehicle. Ltd company to purchase the shares in also the the deposit was paid by him not the Ltd company?
Expert:  JGM replied 1 year ago.
The initial negotiations and the payment of the deposit aren't relevant. If the shell company signed the SPA and the Vendor was naive enough to allow that to happen without, for example, asking for proof of funding or a personal guarantee then I'm afraid the Vendor has no remedy.
Customer: replied 1 year ago.
Thankyou. Maybe my solicitor should have pointed out the relevance and asked for personal guarantee. It was intimated all along up to the completion of the spa that individuals were purchasing then changed last minute to Ltd company.
Expert:  JGM replied 1 year ago.
Your solicitor should certainly have pointed out the risks of proceeding to contract with a shell company without some kind of comfort by way of guarantee of proof of funding. I agree with you.
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