Are business signatories liable for debts?

wastwater

Hi!

My boyfriend is self employed (sole trader). I have recently started taking on more of an admin role (bookkeeping, chasing invoices etc) and we've thought it would be useful for me to have a business debit card so that I can pay in cheques/cash etc into the account. In order to do this I need to become a signatory on the business account. Does this mean that I would be liable for any debts or if (God forbid) the business were to go bust?


Thanks

Savvy_Sue

I'd ask the bank, but ... do you actually need a debit card in order to pay money into the bank? Do they not still provide paying in books at all, or a 'paying-in card'? We have one of the latter for paying in cash at the local Post Office - business account not a sole trader so may be different.

CarlOS

I'd say unless you are a partnership with a partnership agreement in place that states you are equally liable for company debts then no as it would still be a Sole Trader entity and the proprietor (your boyfriend) is legally responsible for debts.

bris

You can be an employee for tax purposes but as long as your not a partner then you are not liable for any debt.


Your BF as a sole trader is liable though so be aware he has no protection from the debt if the business gets into trouble.

Mistral001

Since your boyfriend is a sole trader, he IS the business and is personally responsible for all financial responsibilities of the business. In other words the business cannot go bust, only he can go bust.


However, you have to make sure that you are not in a partnership with your boyfriend. If things got nasty and he was facing business debts he could not pay, he might claim that he was in a business partnership with you through a verbal agreement and try to get you to pay half the debts. As has been suggested he could make you an employee (sole traders can employ people). That would mean roles are clearly defined.