Read in a sunday paper that some building firms feeling the effects of the slump are unlimited and that "the directors have unlimited status, meaning its directors are liable for any debts if the companies they run collapse". I was under impression that it was the shareholders/members of an unlimited company had unlimited liability and this was circumcented to some extent by having a limited company as a shareholder. I appreciate other circumstances affecting the affairs of a company could render directors liable.
Unlimited Companies
- Thread starter dewdrop
- Start date
Some companies do crash [broken link removed] indeed.
The article which was in Sunday Tribune said that because of the unlimited status the directors were liable if the companies collapse. I appreciate that if Directors had signed personal guarantees this would render them personally liable but this was not mentioned in the article. From my knowledge during the roaring Tiger era Directors would be mainly unwilling to sign guarantees and, in fact, when borrowings were taken in their personal names it was often on a non recourse basis other than the security of the asset bought.