My debt or my limited company's debt?

[marmaris30]

If this person knowingly made a loan to your company and you have an agreement that proves this, then you would not normally be liable personally for your company's debts. There is no need for any link to goods or a specific purpose. However your friend might try to claim that the company, being dormant, has no prospect of paying it back and that you have acted recklessly as a director in allowing this to happen. If you have exercised your directorial responsibilities to the best of your ability then this should not be too much of a risk.

 

However if your company has a debt or debts it cannot service then it is insolvent and it is really your responsibility to wind it up, because otherwise a creditor can present a winding-up petition to a court and have it put into administration. Then the Official Receiver would become involved, who would not look on you favourably for having failed to address the problem earlier. Perhaps you should speak to a solicitor about both matters.

[marmaris30]

Well since it looks like you've fulfilled your directorial responsibilities as far as you can, and you apparently have evidence that the loan was made directly to the company, then your defence can be that you are not personally liable, as this money was never in your possession and was knowingly lent to a company. You could ask for your claim to be struck out as manifestly invalid, although a skeleton defence explaining the facts and supporting evidence available would look better. If you get a solicitor to advise you and draft the defence then it should be solid, although you'd have to pay for that of course and in small claims, applications for costs are very limited.

[marmaris30]

As an aside, I wouldn't lend money to a company without security, either over assets or a personal guarantee. If he had actually lent it to you personally to help the business then it would be a completely different matter, but evidently he didn't. That your friend is less cautious is his problem.

[marmaris30]

Still_surviving, point taken. Although unless the lender was particularly unaware of the distinction between individuals and companies, or there was a deliberate attempt to mislead, there doesn't seem to be any implication of self-employment. As long as any money taken out of the company by the shareholders (presumably the OP) was reasonable under the circumstances, and any loans to directors were repaid in full, and especially if there were any staff then that would put any such allusions to bed.

 

If the company was a tax shelter for self-employment then that would be a different matter, but the OP does not suggest it was.