2 min read
What crosses the line
Once you realise the company probably cannot avoid insolvency, continuing to run up debts can be wrongful trading. It is one of the few routes that pierces limited liability and reaches a director’s personal assets — unlike an ordinary unguaranteed debt.
How to protect yourself
Take insolvency advice as soon as trouble looms, minimise further creditor losses, and keep clear board minutes showing you acted to protect creditors. Acting reasonably and early is your defence.
What it means for you
Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.
Frequently asked questions
Can wrongful trading make me pay company debts?
Yes. If you kept trading with no reasonable prospect of avoiding insolvency, a court can order you to contribute personally. Early advice and documented decisions are the defence.
When should I take advice?
The moment insolvency looks likely. Prompt, documented action to protect creditors is what distinguishes reasonable conduct from wrongful trading.
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No personal guarantee means the lender cannot come after your personal assets to recover the loan — the debt…
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What is wrongful trading and how do directors avoid it?
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Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.