Ex-director and company now in liquidation advice

[herbdot]

Hoping for some advice here - I owned a limited company with my then partner. After a messy breakup and horrendous work environment for myself we had the conversation of me being bought out and he and his new partner bought me out mid 2023. The company has now gone into voluntary liquidation because of large debts.

Can there be any backlash onto me as a previous director? My contract of selling my share of the company seems to be very black and white that my involvement was over, I left when there were debts but not such a large amount.

TIA.

I am not a lawyer, but as long as you resigned as a director and were paid before the liquidation process started, then it is nothing to do with you.

Did you make sure that companies house were updated that you were no longer a director, and do you have the audit trail of all events pertaining to you?

that is completely wrong
It depends on the claim but absolutely former directors can still be held personally liable le

This is totally incorrect.

Yes all was updated with companies house straight away. And all money owed to me was sorted long before the liquidation process that has been announced recently

Sounds unlikely. Presumably all the paperwork was filed at the correct time (back in 2023) with companies house and all payments to you were legal (no dividends made when retained earnings were overdrawn, for instance). You can easily check that on companies house. Presumably you have had nothing to do with the company since such as acting as a shadow director, it doesn’t sound like it from your post.

@herbdot ignore me then. I suppose it depends on what the cause of the liquidation was, so best get proper advice. I thought directors could only be held liable after they had resigned if there was some wrongdoing, not just plain insolvency.

That’s right, no involvement from me after I’d left

Was everything above board when you were director?
Did you sign any personal guarantees?
Was all tax paid correctly?
Any directors' loans that were unpaid?

It's not as straightforward as "you resigned, therefore it's no longer anything to do with you".

As this is a voluntary liquidation, I can't imagine you have anything to worry about. If the official receiver was getting involved, that may be different.

I've been through a "voluntary" insolvency due to director misfeasance which started as a MVL and changed to a CVL. The liquidator was pretty much toothless and despite a phoenix company being created by one of the directors and assets diverted there, there were no repercussions and it was closed with huge sums owing to HMRC. As long as the liquidator and their solicitor get their slice of the pie, they seem content.

All above board from what I was aware of. No personal guarantees made. From what I can recall debts were with VAT and some suppliers.

I work in corporate insolvency. Liquidators have to investigate conduct of all directors in last 3 years so if it was late 2023 you resigned they'll send you a questionnaire to fill in. Its just standard. As long as they don't find any evidence of you taking excessive funds out of the business or any other misconduct then you should be absolutely fine. They might also look into the transaction when you were bought out but again, as long as all above board it shouldn't be an issue.

Irrelevant

If debts were “with VAT” that means HMRC

Yes HMRC for VAT

thank You. I just checked the dates: I was bought out very early June 2023, voluntary liquidation was decided mid August 2026.

Why was their VAT debt?

Op fact is… there’s no time limit

but you’ll only beheld liable if you’re actually liable!

so presuming you’re not, you have nothing to worry about out

Not an organisation I want to owe money to

There had been late payments etc due to cash flow issues but a payment plan was in place with HMRC when I left.

Beem through similar. Youre beyond the 3 years so there's no issue. If you werent, they would send a questionnaire and, provided the company was solvent when you resigned, its very unlikely there would be any repurcussions.

As long as there was nothing dodgy going on, it sounds like you should be fine.