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Ben Jones
Ben Jones, UK Lawyer
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In the case of a company operating as a sole trader and one

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In the case of a company operating as a sole trader and one of the partners investing cash into the business over a period of eighteen months. What rights does the investing partner have to being a preferred creditor?

Ben Jones :

Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today. Is the company going insolvent?


Ben The company is trading on the edge and potentially could wind up.

Ben Jones :

The ranking of debts would not really be an issue until the company enters formal insolvency proceedings. That is when there is an official ranking system that would dictate the order in which business debts are satisfied.


When it comes to the creditors of a company, there will be preferential creditors whose debts will be treated in preference to other unsecured creditors.


A list of those who will be treated as preferential creditors is here:


Unless you were a secured creditor, where you had secured as loan to the business, such as under a floating charge, then you are unlikely to be deemed a preferential creditor.

Ben Jones :

Before you try and exit chat can you please let me know if your original query has been answered or if you need me to clarify anything else in relation to it before I close this at my end?


Yes Answered

Ben Jones :

thank you, XXXXX XXXXX best

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