Director Protection Alert

The Risks of Trading Insolvently

Protect Yourself. Protect Your Business. Get Clear, Confidential Guidance Today.

When a company can't pay its bills or its debts are greater than its assets, it may be trading while insolvent — and this puts you, as a director, at risk.

The sooner you understand your position, the safer you are.

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We Act For You, The Director

Our sole focus is protecting your personal assets and ensuring you understand your position clearly.

Your interests come first
Protect your personal assets
Director-focused advice
Confidential protection

We don't work for creditors, liquidators, or other parties. We work exclusively for you — to minimize your personal risk, defend against wrongful trading claims, and help you navigate insolvency with your assets protected.

Unlike many advisors who serve multiple parties, our loyalty is 100% to you as the director. We exist to protect your position, your family's security, and your future — not to maximize creditor recoveries.

Critical Information

Why Trading Insolvently Is Dangerous

If the company continues trading while insolvent, your responsibilities as a director change.
Your duty is no longer to shareholders — it shifts to protecting creditors.

Personal Liability for Company Debts

You could be held personally responsible for company debts — including loans and Bounce Back Loans — putting your personal assets at risk.

Investigations Into Your Conduct

Liquidators and regulatory bodies will investigate your actions as a director, scrutinizing every decision made before insolvency.

Fines or Compensation Orders

Courts can impose significant financial penalties and order you to compensate creditors for losses resulting from wrongful trading.

Director Disqualification

You can be banned from being a company director for 2-15 years, severely limiting your future business opportunities.

In Serious Cases, Legal Action

Wrongful or fraudulent trading can lead to criminal prosecution, resulting in imprisonment and permanent damage to your reputation.

These risks often come from not knowing the business has become insolvent

Most directors don't realize their company is insolvent until problems escalate. Early advice can prevent these serious consequences. The sooner you seek expert guidance, the more options you have to protect yourself and your business.

Self-Assessment

Is My Company Insolvent?

Many directors don't know their business is insolvent until problems escalate.
Recognizing the signs early can save your business — and protect you.

Common Warning Signs

Struggling to pay suppliers, wages, rent, tax or loan repayments — even if just temporarily

Liabilities are greater than assets on the balance sheet

You're "juggling" payments to buy time or delay creditors

Pressure from HMRC or creditors threatening legal action

Using personal funds to keep the business going

Not Sure About Your Position?

Uncertainty is one of the biggest risks directors face. Without knowing whether your company is insolvent, you can't take the right steps to protect yourself.

Free Company Health Check

We offer a free, confidential company health check to clarify your position quickly and help you understand:

  • Whether your company is technically insolvent
  • What risks you face as a director
  • Your safest next steps
  • Options available to you right now
Get Your Free Health Check

Completely confidential • No obligation • Immediate clarity

Know The Difference

Insolvent Trading vs Wrongful Trading

Many people confuse the two — but they are not the same.
Understanding the difference could save you from personal liability.

Insolvent Trading

This simply means continuing to trade while insolvent.

Sometimes a business can be rescued, but decisions must be extremely careful. Not all insolvent trading leads to wrongful trading — if handled correctly with expert guidance.

May be temporary or due to cash flow timing

Can be resolved with proper restructuring

Requires immediate professional advice

Wrongful Trading

This is far more serious.

You may be at risk of wrongful trading if:

  • You knew (or should have known) the company couldn't avoid liquidation
  • You continued trading without taking steps to protect creditors
  • You made decisions based on panic rather than strategy

Critical: If a company goes into liquidation, the actions of the directors will be reviewed, and wrongful trading can lead to serious personal consequences.

The Critical Difference That Protects You

Insolvent trading becomes wrongful trading when you continue operating without proper advice and without taking steps to minimize creditor losses.

The key to protection: Get expert guidance immediately when you suspect insolvency. Document your actions. Show you're acting to protect creditors. This evidence can be the difference between director protection and personal liability.

Avoid These Mistakes

Common Mistakes Directors Don't Realise Are Wrongful

Directors often fall into traps without meaning to.
These actions can cause serious problems later.

Not Filing Accounts or Returns

Missing Companies House deadlines or failing to file accounts on time can be seen as avoiding scrutiny and may indicate wrongful trading.

Building Up Tax Arrears

Allowing VAT, PAYE or Corporation Tax arrears to accumulate shows the company cannot meet basic obligations — a clear sign of insolvency.

Taking Dividends While Insolvent

Paying yourself dividends or drawings when the business is struggling directly harms creditors and is a serious breach of director duties.

Preferential Payments

Paying certain creditors before others — especially connected parties like family or other businesses you control — can be challenged and reversed.

Taking Unrealistic Loans

Accepting loans the company could never realistically repay increases creditor losses and shows reckless disregard for your duties.

Misusing Bounce Back Loans

Using Bounce Back Loan funds incorrectly or for non-business purposes can lead to personal liability and fraud allegations.

Most of These Mistakes Come From Pressure, Panic or Lack of Guidance

Not bad intentions.

When you're under extreme stress, trying to save your business, and worried about your employees and creditors, it's easy to make decisions that seem right at the time but can be challenged later. This is exactly why independent, specialist advice is so critical — we help you navigate these pressures while protecting your position.

Potential Consequences

What Can Happen If You Get It Wrong?

If the company enters insolvency, investigators will look at what happened beforehand.
The consequences can be severe and life-changing.

🔸 Personal Liability

You may be held personally responsible for some or all company debts — including loans and Bounce Back Loans.

This means your personal assets — savings, property, investments — could be at risk to settle company obligations.

🔸 Financial Penalties

Fines or compensation orders may be issued if director duties weren't followed.

Courts can order directors to compensate creditors for losses caused by wrongful trading, often tens of thousands of pounds or more.

🔸 Legal Action

This can range from director disqualification to, in extreme cases, criminal proceedings.

Director Disqualification: Banned from being a director for 2-15 years

Criminal Proceedings: For fraudulent trading or serious breaches, which can result in imprisonment

The Impact Can Be Life-Changing

These consequences don't just affect your business — they affect your family, your future opportunities, your financial security, and your reputation.

Which is why early advice is critical.

Take Action Now

What Should You Do If You Think You're Trading Insolvently?

Follow these five critical steps to protect yourself and your business.

1

Don't Panic — But Don't Delay

Acting quickly protects you. The longer you wait, the fewer options you have and the greater your personal risk becomes. Time is critical, but panic leads to poor decisions.

2

Get Independent, Specialist Advice

Avoid talking only to accountants or people emotionally involved — you need neutral, experienced guidance from insolvency specialists who understand director protection.

Your accountant may be excellent with numbers, but insolvency law and director protection require specialist expertise.

3

Understand Your Responsibilities

Your duty switches to creditors, not shareholders. Everything you do from this point must prioritize minimizing creditor losses. This shift in duty is the foundation of director protection.

4

Stop Making Big Decisions Without Proper Advice

No selling assets

No taking dividends

No choosing which creditors to pay first

Every decision you make can be examined later. Get guidance before acting.

5

Book a Confidential Advice Call

A quick conversation can prevent a long-term problem. Our specialists will listen without judgement, assess your situation, and give you clear guidance on your safest next steps.

Book Your Free Case Review Now

At Tenable Business Support, We Offer a Free Initial Case Review

Giving you clarity, protection, and a clear path forward — with no obligation.

Clear Understanding of Your Position

The Safest Steps to Take

A Plan to Protect Yourself

Calm Guidance Without Judgement

Free Case Review

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If you think your business may be trading insolvently — or you're not sure — speak to us before taking another step.

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