LEXLAW Solicitors & Barristers
When a company defaults, directors who have signed personal guarantees may face direct personal enforcement. This guide explains how personal guarantees operate under UK law, when liability arises, how creditors pursue guarantors, and what legal options may be available to protect personal assets.
Sections 235 and 236 of the Insolvency Act 1986 impose powerful duties on company directors, officers, employees, and even third parties to co-operate with insolvency office-holders such as liquidators and administrators. Failure to assist properly during liquidation, administration, or bankruptcy can result in personal sanctions, court orders, fines, and even director disqualification.
A winding-up order places a company into compulsory liquidation and has immediate legal and financial consequences for directors, creditors, and employees. This guide explains what happens after a winding-up petition order is made, the role of the liquidator, and the key risks and options that follow.
A winding up petition can paralyse a business overnight. Bank accounts are frozen, payments become unlawful, and directors face personal exposure. A UK Validation Order is often the only legal remedy that allows a company to keep trading lawfully. This comprehensive 2026 guide explains how validation orders work, when they are granted, and why early instruction of specialist insolvency lawyers is critical.
A HMRC Time to Pay (TTP) arrangement lets businesses spread unpaid tax over manageable monthly instalments. In 2026, with HMRC enforcement increasing, well-prepared TTP proposals backed by financial evidence help avoid winding-up petitions, protect directors, and keep businesses trading.
A letter of credit is a powerful trade finance instrument that protects both buyers and sellers by reducing payment risk in domestic and international transactions. When structured correctly, it provides certainty of payment, improves cash flow, and limits exposure to counterparty default.
This detailed guide explains the impact of compulsory liquidation. Early engagement with specialist insolvency and tax counsel is the most critical factor in minimising director exposure and defending or managing the process effectively. Our specialist solicitors and barristers are available to assist on a discounted fixed fee arrangement.
The High Court ordered the former directors of Evershine Travel Limited (In Liquidation) to repay more than £1.4 million after treating company funds as their own and authorising unlawful dividends while the company faced a £17.58 million deficit to creditors. The case highlights the severe consequences for directors who breach duties owed under the Companies Act 2006 once a company approaches insolvency.
The High Court ordered Mr Steven Bell to repay substantial sums after causing BSS LED [R&D] Limited to enter into transactions at an undervalue and make preferential payments to connected companies, in breach of directors’ duties under the Companies Act 2006 and the Insolvency Act 1986.
The High Court held that Ronojoy Nag was liable for misfeasance and breach of fiduciary duty after diverting company assets during insolvency, while his wife Amanda Nag was found liable for dishonest assistance and knowing receipt, ordering both to account for misapplied funds.