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Original poster

Really worried but can't talk to anyone irl re: dhs work situation

41 replies

Limoges08 · 16/03/2023 16:03

Hi 👋

Longtime mn poster (fat ball, penis beaker, old korean lady etc) I've nn change.

Dw came home a couple of days ago looking like she had the weight of the world on her shoulders:(
She's been a director of a small ltd company for the past couple of years.

Times are hard and the company isn't making profits.
She needs to make sure she takes action so she's not liable obviously (I've suggested they get in a business consultant...)

But I'm spiralling a bit tbh
I grew up poor. We've worked so hard and made plans but...now it all feels shaky :(

We are not young (51) so she'll likely never reach this salary again (which is fine, we were both poor as church mice when we married!).

I care for a relative so I'm very limited in what I can do. I can work about 12 hours nmw per week. I'm actively looking for something atm.
Also share a car with my child half the week so that's also limiting.

We do have some savings and not much debt (a loan with about £2k left and about £500 on a 0% cc)
I own my car, hers is a company car.

Mortgage has 4 years left on a low fixed rate. The plan (ha!) was then to spend savings paying off the balance (approx: £50k) Or draw down 25% of her pension at 55.

But now...? I think the most likely scenario is that they will sell off some or all of the company. Can't see a new owner wanting current staff?

I'm very open to working pt again (I've done several pt jobs since dc) but am now quite limited due to care for relative (sorry, bit vague I know...and not likely to change for a while)

I'd really like to keep the house :(
Dc still at home so downsizing would be tricky. Not impossible, obviously, but not ideal at all.

I can cut down food bill, stop spending on amazon!! :) but we aren't extravagant. Not much to cut back on.

I suppose I want advice on things/action we can take NOW to help mitigate possible redundancy...

I've come up with: try and increase savings, cut discretionary spending, not on holiday this year..

Any advice welcomed...and sorry if you've been through this too :(

OP posts:
Original poster
Limoges08 · 16/03/2023 16:48

bucketloadofcats · 16/03/2023 16:42

Times are hard and the company isn't making profits.
She needs to make sure she takes action so she's not liable obviously

There's nothing obvious unless she's been committing fraud or failing in her duties as a director. The whole point of a limited company is to limit your own liability.

I'm unclear if she doesn't understand what's going on, or something has got lost in translation when she's spoken to you, but I get the sense that you're panicking about some things that might not even be applicable.

Separately, it does sound like she might lose her job, which is a worry in itself, but a very different worry to being "liable".

Yes I agree.

I think we need to sit down and discuss it...when I was a director I was only liable to an extent (as the company articles stated)
And had liability insurance too but that's a long time ago.

OP posts:
Original poster
Limoges08 · 16/03/2023 16:49

Fragrantandfoolish · 16/03/2023 16:44

I do t understand this either, if it’s a limited company how is she liable? Unless fraudulent activity?

Absolutely no fraud.
I think they just need to show they've done all they can to avoid selling/closing.

OP posts:
MichelleScarn · 16/03/2023 16:50

Has your relative who needs the care had a ss assessment to make sure they're getting everything they're entitled to including any aspects of formal carers?
I know you're prob not wanting to share too much, but is this an elderly relative or younger who is likely to need your care for further decades?

Fragrantandfoolish · 16/03/2023 16:51

Limoges08 · 16/03/2023 16:49

Absolutely no fraud.
I think they just need to show they've done all they can to avoid selling/closing.

Show quote history

They don’t need to avoid selling, they can sell their company any time they choose. They can also close it down any time they choose. If no fraud she has no real liability

I think you need to speak to her as there seems some confusion.

Original poster
Limoges08 · 16/03/2023 16:51

I'm going to ask for a chat later. I think they are a bit blindsided by it all really
(hard with young ears around!)

OP posts:
Original poster
Limoges08 · 16/03/2023 16:53

MichelleScarn · 16/03/2023 16:50

Has your relative who needs the care had a ss assessment to make sure they're getting everything they're entitled to including any aspects of formal carers?
I know you're prob not wanting to share too much, but is this an elderly relative or younger who is likely to need your care for further decades?

Elderly.
Multiple co morbidites plus now some cognitive decline.
I'll continue as long as I can but I do have my limits and if they continue to decline they may need nursing care.
Sorry don't want to be more specific

OP posts:
Original poster
Limoges08 · 16/03/2023 16:54

Sorry, to answer your question more fully they get AA and have a disabled badge.

OP posts:
Original poster
Limoges08 · 16/03/2023 17:01

I found this online which worried me:

"The legal structure of the company limits directors' personal liability for company debts. However, suppose the company is in financial difficulty or has become insolvent. In that case, the directors may be held personally liable if they take any action or omit taking an action that worsens their creditors' position."

OP posts:
Calmdown14 · 16/03/2023 17:34

Okay, you seem to be panicking more than is necessary here.

Unless you have other very large outgoings you haven't mentioned, you have a small mortgage and not much debt.

Servicing a 50k mortgage doesn't require a huge income. Are you currently overpaying so the monthly cost is high? As long as you have a PT job and she has a job of some kind then you can surely stay afloat?

But she's got good skills and will likely be pretty employable. I'd be updating my CV and making sure I was ready to apply but would hang on for redundancy unless something exceptional arises.

In the meantime do what you can to take the pressure off. Phone the likes of Sky and tell them you are leaving (be persistent with this) and you can usually get a discount, be frugal with the food shop, cut down luxuries and build a buffer/ get rid of the debt depending on the interest. Get your monthly comments as low as possible.

Original poster
Limoges08 · 16/03/2023 17:36

Calmdown14 · 16/03/2023 17:34

Okay, you seem to be panicking more than is necessary here.

Unless you have other very large outgoings you haven't mentioned, you have a small mortgage and not much debt.

Servicing a 50k mortgage doesn't require a huge income. Are you currently overpaying so the monthly cost is high? As long as you have a PT job and she has a job of some kind then you can surely stay afloat?

But she's got good skills and will likely be pretty employable. I'd be updating my CV and making sure I was ready to apply but would hang on for redundancy unless something exceptional arises.

In the meantime do what you can to take the pressure off. Phone the likes of Sky and tell them you are leaving (be persistent with this) and you can usually get a discount, be frugal with the food shop, cut down luxuries and build a buffer/ get rid of the debt depending on the interest. Get your monthly comments as low as possible.

I love your nn! :)

Sorry, to be clear mortgage is currently £90k. In 4 years it's projected to be £50k balance which was what we planned to pay off.

OP posts:
Calmdown14 · 16/03/2023 17:42

It's still not crazy large and you likely have decent equity. If you need a payment holiday you'd probably get one.

Your partner is going to be feeling awful. I think sitting down and working out your monthly outgoings, what you can cut and the minimum joint salary you need would be helpful.

It may show you both that you can manage on less and make positive life style changes if need be. We all get used to spending what we bring in so really looking at this from time to time is a useful exercise (and may help you to be in a better frame of mind to support her)

Original poster
Limoges08 · 16/03/2023 17:50

Calmdown14 · 16/03/2023 17:42

It's still not crazy large and you likely have decent equity. If you need a payment holiday you'd probably get one.

Your partner is going to be feeling awful. I think sitting down and working out your monthly outgoings, what you can cut and the minimum joint salary you need would be helpful.

It may show you both that you can manage on less and make positive life style changes if need be. We all get used to spending what we bring in so really looking at this from time to time is a useful exercise (and may help you to be in a better frame of mind to support her)

Thank you

OP posts:
HurryShadow · 16/03/2023 18:55

Limoges08 · 16/03/2023 16:41

My understanding is that if the directors don't take action to show they have tried to ensure creditors get paid they are liable?
Happy to be told I'm wrong if not the case!

Show quote history

Directors have certain responsibilities in terms of running a company, but they can't be held liable for the debts of the company.

Sometimes if a director has been fraudulent (under the Covid loan scheme, for example) HMRC can and do come after directors personally, but this is the exception, not the norm.

The whole point of operating as a limited company is that the liability of the owners is limited to the value of their shareholding.

If it is genuinely just a failing business, remember, companies go bust all the time. None of the directors of Thomas Cook, for example, had to settle the company's debts privately.

Your DW should be absolutely fine from that perspective.

Unfortunately, if the company is failing, even if her contract says she is owed 6 months pay in case of redundancy, the chances of her getting that might be limited. She might be entitled to statutory redundancy, but her status as a director might mean this isn't the case.

Is she definitely a director shown at Companies House? Is she a shareholder in the business? Does she have any personal money tied up in the company?

If the company has a good basic trade, a buyer might be found, but they'd likely buy the business (trade, contracts, etc) not the company itself. They could choose to take on the staff, or they might choose not to. If they don't, the existing company would need to make the staff redundant, but hopefully the sale of the business would enable the company to pay redundancy costs.

This government page might help Your rights if your employer is insolvent

As PP's have said, it's very, very unlikely that your DW would be liable for any of the company's liabilities, so I would put that concern out of your mind.

I would suggest putting her feelers out in terms of another job. There might be an argument to hanging around in the hope that things get better or she gets a redundancy payment, but sometimes a job with stability is a far better bet than hanging around in hope.

HurryShadow · 16/03/2023 19:01

Limoges08 · 16/03/2023 17:01

I found this online which worried me:

"The legal structure of the company limits directors' personal liability for company debts. However, suppose the company is in financial difficulty or has become insolvent. In that case, the directors may be held personally liable if they take any action or omit taking an action that worsens their creditors' position."

Another, better explained version is:

While company status offers valuable protection to a director, there are certain situations where limited liability can be disregarded, leaving the director responsible for paying the company’s debts.

These include:

  • Overdrawn director’s loan accounts
  • Signing a personal guarantee
  • Debts have accumulated due to fraudulent means (such as taking on credit you knew you wouldn’t be able to repay)
  • Director misconduct
  • Continuing to pay shareholders dividends whilst the company is insolvent
  • Withdrawing and/or using company funds for non-business activity; this is an offence known as misfeasance
  • Disposing of the company's assets at undervalue or no value

As you can see with that list (taken from here), there is a common theme - a director acting inappropriately, which it doesn't sound like your DW is.

Original poster
Limoges08 · 16/03/2023 19:14

HurryShadow · 16/03/2023 19:01

Another, better explained version is:

While company status offers valuable protection to a director, there are certain situations where limited liability can be disregarded, leaving the director responsible for paying the company’s debts.

These include:

  • Overdrawn director’s loan accounts
  • Signing a personal guarantee
  • Debts have accumulated due to fraudulent means (such as taking on credit you knew you wouldn’t be able to repay)
  • Director misconduct
  • Continuing to pay shareholders dividends whilst the company is insolvent
  • Withdrawing and/or using company funds for non-business activity; this is an offence known as misfeasance
  • Disposing of the company's assets at undervalue or no value

As you can see with that list (taken from here), there is a common theme - a director acting inappropriately, which it doesn't sound like your DW is.

Show quote history

None of that applies ^ so thank you you've put my mind at rest x

Had a chat earlier. They are getting advice 👍dw seems happier today.

OP posts:
Original poster
Limoges08 · 16/03/2023 19:16

HurryShadow · 16/03/2023 18:55

Directors have certain responsibilities in terms of running a company, but they can't be held liable for the debts of the company.

Sometimes if a director has been fraudulent (under the Covid loan scheme, for example) HMRC can and do come after directors personally, but this is the exception, not the norm.

The whole point of operating as a limited company is that the liability of the owners is limited to the value of their shareholding.

If it is genuinely just a failing business, remember, companies go bust all the time. None of the directors of Thomas Cook, for example, had to settle the company's debts privately.

Your DW should be absolutely fine from that perspective.

Unfortunately, if the company is failing, even if her contract says she is owed 6 months pay in case of redundancy, the chances of her getting that might be limited. She might be entitled to statutory redundancy, but her status as a director might mean this isn't the case.

Is she definitely a director shown at Companies House? Is she a shareholder in the business? Does she have any personal money tied up in the company?

If the company has a good basic trade, a buyer might be found, but they'd likely buy the business (trade, contracts, etc) not the company itself. They could choose to take on the staff, or they might choose not to. If they don't, the existing company would need to make the staff redundant, but hopefully the sale of the business would enable the company to pay redundancy costs.

This government page might help Your rights if your employer is insolvent

As PP's have said, it's very, very unlikely that your DW would be liable for any of the company's liabilities, so I would put that concern out of your mind.

I would suggest putting her feelers out in terms of another job. There might be an argument to hanging around in the hope that things get better or she gets a redundancy payment, but sometimes a job with stability is a far better bet than hanging around in hope.

Show quote history

Thank you

OP posts:
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