Company debts

Denny54

Hello,

If i run two companies at different locations and i owe money to a electricity company at location A and then business gets shut down due to personal issues etc can that debt be chased at my other business location B?

Both are different companies but i am director of both companies.

I am not running away from the debt but there are some personal issues involved which i dont want to explain fully but i am not the only person liable for this debt.

Thank you for all advise

sourcrates

Short answer is no.

If a company goes into liquidation owing money to creditors, and has no assets to realise, then its just tough luck on the creditors.

Assuming company B is a separate entity to company A.

Surely running two companies you would be aware of how this all works?

MattMattMattUK

Denny54 said:

Hello,

If i run two companies at different locations and i owe money to a electricity company at location A and then business gets shut down due to personal issues etc can that debt be chased at my other business location B?

Not unless one is the parent company of the other in a group, or one guaranteed the other's energy contract. 

Denny54 said:

Both are different companies but i am director of both companies.

Are there any personal guarantees in place?

Denny54 said:

I am not running away from the debt but there are some personal issues involved which i dont want to explain fully but i am not the only person liable for this debt.

Unless you have personal guarantees in place no person is directly liable for the debt, the company is. If the company has distributed funds to shareholders that were not it's funds to distribute then the directors are liable, if the directors wrongly traded leaving the company insolvent then the directors are liable. 

Denny54 said:

Thank you for all advise

Do you have an accountant? It seems you might have got yourself into a bit of a mess here, potentially having an insolvent business on your hands which you might need proper advice for. Remember that you might not be able to continue being a director of one business if the other becomes insolvent and if you try to run things behind the scenes that is not allowed either, so you need to grasp the nettle and deal with this. 

noitsnotme

Are they both actually limited companies registered at Companies House?  I only ask because there are often people posting on here calling their business a ’company’ when they are in fact sole traders.