Where the business ends and you begin.
WHAT A SOLE TRADER CARRIES
Unlimited personal liability for business debts.
WHAT THAT MEANS
Personal assets are exposed.
WHAT A COMPANY PROVIDES
Separation, in principle.
WHAT REMOVES THAT PROTECTION IN PRACTICE
Personal guarantees Director liability for unremitted deductions Trading while insolvent Fraudulent or reckless conduct Mixing personal and business finances
WHY PERSONAL GUARANTEES MATTER MOST
They are common, routinely signed, and they remove the protection entirely.
WHERE THEY APPEAR
Bank facilities Leases Supplier credit Equipment finance
WHAT TO DO
Establish which you have given, and to whom.
WHAT TO ASK BEFORE SIGNING ONE
Whether it is genuinely required What it covers Whether it can be limited or removed later
WHAT TO NEGOTIATE
A cap, or a time limit.
WHAT TO KNOW ABOUT DEDUCTED AMOUNTS
Employee tax and pension contributions deducted and not remitted carry personal exposure.
WHY THAT MATTERS ENORMOUSLY
It is the commonest route to personal liability for owners.
WHAT TO ENSURE
That remittances are made, whatever else is short.
WHAT TO DO IF THE BUSINESS CANNOT MEET ITS OBLIGATIONS
Take advice immediately.
WHY IMMEDIATELY
Continuing to trade while insolvent increases exposure.
WHAT TO REVIEW ANNUALLY
Your guarantees and personal exposure.
