When it becomes apparent that a company is insolvent, a directors responsibility is to the creditors (the people the company owes money to) and not the shareholders or members.
Directors must seek advice as soon as possible to minimise the risk of accusations of wrongful or unlawful trading once the company is in liquidation.
The best thing for a director to do in this situation is to contact an insolvency practitioner as soon as possible, chat through the problem and find out what their options are. At Redman Nichols Butler initial meetings are always free.
For advice on bankruptcy, liquidation, solvent liquidation and all the other forms of insolvency procedure, please call Stella on 01377 257788, 01904 520116 or 01724 230060 and she will make you an appointment with one of our insolvency professionals in our Driffield, York or Scunthorpe offices. Meetings can be held virtually or in person at any of our offices whilst observing the socially distancing measures.