Childcare charity closing - directors liability

dodo69

We held a directors meeting yesterday of a company limited by guarantee and a charity. it is plain that our working capital is not enough and we will not be able to continue for much longer. There are some assets and some debts (including working overdraft) and it is unlikely we will have a surplus or sufficient to pay redundancy. Some of us met for coffee this morning and wondered what our liability is - we have invested nothing.

Savvy_Sue

I think this is something you need to take proper advice on. In theory you won't have a liability, if you are a company ltd by guarantee, but it can depend on the terms of the guarantee - can you find your governing document? - and whether or not you've been negligent (not suggesting you have).

If a company can't afford to pay redundancy, then the government does, AFAIK.

dodo69

No negligence just economic reality and a tightening on credit by the bank. Seeing solicitor tomorrow so will see.

anamenottaken

Savvy_Sue wrote: »

I think this is something you need to take proper advice on. In theory you won't have a liability, if you are a company ltd by guarantee, but it can depend on the terms of the guarantee - can you find your governing document? - and whether or not you've been negligent (not suggesting you have).

If a company can't afford to pay redundancy, then the government does, AFAIK.

The liability (except in negligence cases) is actually how much a member guarantees - normally £1 in my experience.

Savvy_Sue

anamenottaken wrote: »

The liability (except in negligence cases) is actually how much a member guarantees - normally £1 in my experience.

Yes, but it does depend on the company: our charity (also a ltd co) has members as well as Directors, and it's the members as well as the Directors who stump up £1 if we go bust.

Was going to add last night: I said the OP needed 'proper' advice, so the question is where to get it - it's possible Businesslink will point you to some general but employer specific advice. Also if you've used volunteers, then contact your local volunteer group, especially if you're members - google volunteer plus your town / city / area. And if you have links or membership of a national or local childcare specific organisation, then contact them, eg when I was running out of school clubs we had a local organisation who helped us find initial funding and were then available for ongoing advice.

Just read your last post properly: you are seeing a solicitor, so that is the right course of action, that way you get advice you can 'rely' on. However knowing a bit beforehand is never a bad thing!