Director responsible for unpaid Loan?

[tinal]

Hi All,
My husband was a Director in Single Member Private Company Limited by Shares. He was a Director in name only, required to set up the company. His father was the owner of the company and the other Director. My husband was paid as an employee of the company.

The business was wound up last year unfortunately. However, my husband has just received a Court Summons for an upaid loan to one of the banks. His father has also received same. My husband never signed for this loan as he had no dealings with the running of the company.

Is he therefore liable for same and if he is, will the Banks/Courts come after our family home? The amount of the loan is €25k

Many thanks

 

[sean.c]

You need to talk to a solicitor, firstly, to understand all the ins and outs of the situation.

Secondly, it's nonsense to say that your husband wasn't involved or had no dealings with the running of the company - as a director, he's equally responsible.

However, as it's a limited company, he's "liable only to the extent of any unpaid shares held". Unless, of course, he's signed a personal guarantee (which it seems he hasn't).

So stop worrying and call a solicitor.

 

[tinal]

Thanks for the reply Sean C. We do have an appointment with the solicitor but was hoping to put my mind at rest a bit by posting here. I admit that my husband was naive in signing up to be a Director without looking into it in more detail, but his Father assured him that it was just a formality in setting up the company (2 Directors required). He did not have any input into the business after that point, merely as an employee.

Thanks again

 

[mercman]

As a Director, the ultimate responsibility remans with he Directors. Very hard to absorb that his father would hane him out to dry. Looks like a good family argument is about to commence.

 

[Gekko]

his Father assured him that it was just a formality in setting up the company

Famous last words...

If your husband hasn't given any PGs and there was no reckless trading/fraudulent preference/etc involved, he should be fine.

Although the fact that he's been issued with a Court summons is a little unnerving.

Speak with a solicitor...a good solicitor.