moderators where are you , page-11

You guys are missing the point....

directors under under an obligation to ensure the company does not trade when the company cannot meet its debts as and when they fall due. My understanding is they can be personally liable if they allow the company to continue trading where they know or ought reasonably know the company cannot meet its debts as and when they fall due.

Its all about cash-flow solvency not assets exceeding liabilities. Many businesses that are balance sheet solvent (i.e. assets exceed liabilities) still go under due to inability to pay short term debt.

Thats why the directors have been so careful to get advice on ability of the company to meet debts as and when they fall due.



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