Andrew Needham looks at the circumstances where a company director can be held personally responsible for the payment of a penalty imposed on the company by the issue of a personal liability notice.
One of the main attractions of forming a limited company is that it has limited liability. Under limited liability, a director or investor in a company is only liable for the money that was invested in the event that the company goes bankrupt.
For example, a company is formed and issues £1,000 in shares. The company subsequently goes bankrupt. The shareholder's liability is limited to the £1,000 invested. Even if the company owes £50,000, creditors will generally not come after the shareholder's assets, and the liability is limited to the £1,000 originally invested.
Are there any exceptions?
Unfortunately, for a company
