What Happens When a Company Goes Into Administration UK: Step-by-Step Guide
Key Takeaways When a company enters administration in the UK, an independent licensed insolvency practitioner (administrator) assumes control. This move protects the business from creditor action and opens up options for rescue, restructure, or asset sale. The process begins with a statutory moratorium, pausing most legal actions by creditors. This breathing space allows the administrator […]
Emergency Funding Round: Legal Options & Templates for UK Companies
Key Takeaways An emergency funding round lets UK startups and small businesses secure urgent capital rapidly using tools like Advance Subscription Agreements (ASAs), Convertible Loan Notes, or SAFE agreements. Choosing the right legal structure is crucial for preserving SEIS or EIS eligibility and preventing compliance pitfalls. Poorly drafted emergency funding documents can lead to disputes, […]
When Are Directors Personally Liable? UK Triggers & Protection Guide
Key Takeaways Directors of UK companies can be personally liable if they breach their statutory duties under the Companies Act 2006, act outside the scope of limited liability, or misuse company powers. Personal liability frequently arises from wrongful trading, fraudulent trading, or giving a personal guarantee for company debts. If a company fails to pay […]
5 Mistakes That Could Get You Disqualified as a Director
Key Takeaways Many directors in England and Wales underestimate how easily simple compliance errors—like missing a filing deadline—can result in disqualification. Trading while insolvent remains one of the main reasons for director bans, with possible disqualification lasting up to 15 years. Ignoring VAT, PAYE or other tax obligations is seen as unfit conduct and commonly […]
Can You Close a Company With Debt? Legal Options Explained UK
Key Takeaways You can close a company with debt in the UK, but formal insolvency procedures such as Creditors’ Voluntary Liquidation (CVL) are required if the company can’t pay its debts. Attempting to dissolve or strike off a company with unpaid debts is rarely successful, because creditors—including HMRC—can object or reverse the process. Choosing the […]
Company Bankruptcy UK: Director Duties, Risks & Protection 2026
Key Takeaways Directors have precise duties under the Insolvency Act 1986 before, during, and after company bankruptcy—understanding these is essential. Failing to spot early signs of insolvency and continuing to trade can make directors personally liable for company debts (wrongful or fraudulent trading). Keeping up-to-date records and clear communication with creditors demonstrates that a director […]
Liquidation Preference Clauses UK: Complete Guide & Examples
Key Takeaways A liquidation preference clause lets investors recover their investment before ordinary shareholders if your company is sold or closed. Understanding the difference between participating and non-participating liquidation preference is vital for both founders and investors. Misunderstanding or poorly drafting a liquidation preference can lead to costly disputes or unexpected investor payouts in a […]
1x vs 2x Liquidation Preference UK: Payout Scenarios & Term Sheet Guide
Key Takeaways Understanding the difference between 1x and 2x liquidation preference is crucial for UK founders, as it dictates how much investors receive before founders during an exit. A 2x liquidation preference can sharply decrease a founder’s payout when exit values are close to the invested amount, so it must be scrutinised. It’s essential to […]
Can Shareholders Be Liable for Company Debts in the UK?
Key Takeaways In the UK, shareholders of limited companies benefit from limited liability, shielding them from personal responsibility for company debts except in defined circumstances. Shareholders can be personally liable for company debts if they provide a personal guarantee, act as a shadow director, or have unpaid share capital. Not understanding shareholder liability under English […]
When Are Directors Personally Liable? UK Triggers & Protections
Key Takeaways Directors in England & Wales can be personally liable if they breach duties under the Companies Act 2006, act dishonestly or fraudulently, or authorise wrongful trading during insolvency. Signing a personal guarantee or misusing a Bounce Back Loan places company debts directly on the director. Failure to fulfil fiduciary duties or neglecting health […]
