Director Personal Liability Risk Calculator

Director personal liability risk refers to the potential for company directors to be held personally responsible for company debts and actions, beyond the protection of limited liability. This can occur through personal guarantees, director loan accounts, wrongful trading, misfeasance claims, or breach of fiduciary duties. Understanding your risk level is crucial for protecting your personal assets.

Our calculator is based on established legal principles and common risk factors that affect UK company directors. It provides a reliable initial assessment using a weighted scoring system developed from over 60 years of combined experience. However, individual circumstances vary, and we recommend professional consultation for detailed analysis and specific legal advice.

Yes, the assessment is completely confidential. We do not store your responses or personal information from the calculator. The tool runs entirely in your browser and provides immediate insights without requiring registration or data submission. Your privacy and confidentiality are our priority.

Several key factors can increase your personal liability risk:

• Personal guarantees for company debts
• Debit director loan accounts
• Trading while technically insolvent
• Asset extraction or undervalue transactions
• Poor financial management and record-keeping

If you receive a high or critical risk score, immediate action is recommended:

• Seek professional advice immediately
• Review and document all director decisions
• Implement strict financial monitoring
• Consider asset protection strategies
• Stop taking further personal guarantees

Our team can provide immediate consultation to help protect your position and develop a comprehensive protection strategy.

Yes, limited liability protection can fail in several circumstances. Directors can become personally liable through wrongful trading, fraudulent trading, misfeasance claims, breach of fiduciary duties, or when personal guarantees have been given. The "corporate veil" can be pierced when directors act improperly or when the company is used as a facade for fraudulent activities. This is why regular risk assessment is crucial.

We recommend assessing your director liability risk quarterly, or whenever there are significant changes to your business circumstances. Key triggers for reassessment include: changes in financial position, new personal guarantees, director loan account movements, major transactions, or when facing financial difficulties. Regular monitoring helps identify risks early when they're easier to address.

Wrongful Trading: Occurs when directors continue trading when they knew, or ought to have known, that there was no reasonable prospect of avoiding insolvent liquidation. This is a civil matter with potential personal liability for company losses.

Fraudulent Trading: Involves carrying on business with intent to defraud creditors or for fraudulent purposes. This is both a civil and criminal offense with more severe penalties, including potential imprisonment.