As long as there’s no evidence of misconduct having led to your company’s financial decline the ‘veil of incorporation’ that protects you from personal liability remains in place. This means that you can move on from running a business with debts as the company closes down permanently.
If you’ve provided a personal guarantee for a business loan you’ll be liable to repay the full outstanding amount, but in general, the corporate structure protects you from liability. Entering CVL clearly has advantages for business creditors in minimising their losses, but it can also benefit you as a director.
You may be able to claim director redundancy pay if you work under a contract of employment and take a regular salary under PAYE, and this could be used to pay for the CVL process if required.
For more information on what happens to debts when you close a company, please get in touch with our expert team at Company Closure to arrange a free consultation.