Ask Question
BusinessBusiness
29 October, 10:40

In what circumstances might directors be held personally responsible for debts incurred by a company?

+1
Answers (1)
  1. 29 October, 10:44
    0
    If the company is registered as an unlimited liability company

    Explanation:

    There are two different types of company namely limited and unlimited liability company.

    Companies registered under limited liability company, as the name "limited" implies, the liability of the directors is limited to their shares.

    This provides immunity to the directors against any incurred debt by the company as the company is seen as a different entity. such immunity is not provided in unlimited liability company as their liabilities is not limited to contributed shares under the registration acts guiding such companies.

    This means that the directors of the unlimited company might be held responsible for any debt that the assets of the company can not cater for. The directors might forfeit personal assets in settlement of company's debt.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “In what circumstances might directors be held personally responsible for debts incurred by a company? ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
How does Chloe Spencer's website make money? (Site 1)
Answers (1)
During Year 3, Manfred Corp. guaranteed a supplier's $500,000 loan from a bank. On October 1, Year 4, Manfred was notified that the supplier had defaulted on the loan and filed for bankruptcy protection.
Answers (1)
Select all the correct answers. How can the government of a nation invest in physical capital? by building highways, railways, and airports by introducing mandatory physical training in schools by providing power and Internet connections by
Answers (1)
The actual cost of direct materials is $10.50 per pound. The standard cost per pound is $11.75. 42) During the current period 10,000 pounds were used in production and 11,500 pounds werepurchased.
Answers (1)
Nepotism is--a. the practice of basing promotions on how long someone has been employed by a given company b. the practice of promoting exclusively from within a firm c.
Answers (1)
New Questions in Business
The phases of project management are: A. planning, scheduling, and controlling. B. planning, programming, and budgeting. C. planning, organizing, staffing, leading, and controlling. D. different for manufacturing projects than for service projects.
Answers (1)
Fun toyz corporation makes skateboards, which it sells to consumers, including holly and ira. due to a defect, holly is injured while using her new board. ira's board has the same defect, but he is not injured.
Answers (1)
What is the best definition for profit?
Answers (2)
Suppose your New Year resolution is to get back in shape. You are considering various ways of doing this: you can sign up for a gym membership, walk to work, take the stairs instead of the elevator, or watch your diet.
Answers (1)
Comparable worth refers to a. the value of a job to society. b. equal pay for different types of work that are equally demanding. c. the minimum wage. d. the relative worth of men and women in the workplace.
Answers (1)
Home » Business » In what circumstances might directors be held personally responsible for debts incurred by a company?
Sign Up Forgot Password?