- This topic has 3 replies, 2 voices, and was last updated 6 years ago by
.
- Posts
Good day sir
When directors knowingly carry on business operations with no intention of paying creditors whilst the company is deemed insolvent who is liable, the directors or the company itself?The company is primarily liable but, in the scenario that you describe, the Court (on the application of the liquidator) would most probably find the directors criminally liable and ordered to pay such sum of money as the Court may direct into the company’s assets for the liquidator to increase the amounts paid to creditors
In addition, of course, the directors also face the possibility of a prison sentence (up to 10 years!)
This sounds like an objective test question that you are querying! Where’s it from and give me a reference please if you’re not happy with my answer
- You must be logged in to reply to this topic.