Directors’ Liability & Exposure

There is often a misconception that Directors are not liable for limited company debts. You may be at risk if you have signed a Personal Guarantee, received a CBILS or BBL'S Loan, borrowed cash from your business, carried out business wrongfully. If any of these issues apply to you then you may be personally liable for the debts and your personal assets could be a risk.

Down arrow

Safeguarding Your Financial Interests with GMD

In the intricate world of corporate governance, there exists a common misconception that directors of limited companies are entirely shielded from personal liability for company debts. However, it is essential to dispel this misconception and acknowledge that certain circumstances can expose directors to financial risk and personal liability. At GMD, we are committed to helping you understand these risks, navigate potential pitfalls, and safeguard your personal assets.

The Misconception of Limited Liability

Limited liability, a fundamental principle for directors of limited companies, offers protection in many scenarios. It shields personal assets from being used to satisfy company debts. However, it is crucial to recognise that this protection is not absolute, and there are situations where directors can find themselves personally exposed to financial risks and liability.

Identifying Potential Risks

Directors can face personal liability in various situations, including:

  • Personal Guarantees: Signing a Personal Guarantee, especially in the context of loans such as those provided through the Coronavirus Business Interruption Loan Scheme (CBILS) or the Bounce Back Loan Scheme (BBL'S), can expose directors to personal liability. Such guarantees make directors personally responsible for repaying the loan if the business defaults, potentially putting personal assets at risk.
  • Borrowing from the Business: If a director borrows money from their own business, it is vital to ensure that the loan is properly documented and managed to prevent misunderstandings that could lead to personal liability.
  • Wrongful Business Practices: Engaging in wrongful business practices, such as trading while insolvent, fraudulent activities, or breaching fiduciary duties, can also result in personal liability. In such cases, the liability may extend not only to the company's creditors but also to parties harmed by the director's actions.

Discuss your case with our Experts

Our team are always on hand to help guide you in the right direction.

GMD: Your Partner in Mitigating Risks

At GMD, we understand the intricacies of directors' liability and exposure. Our goal is to empower you to navigate these complexities and protect your personal assets. Here's how we can help:

  • Risk Assessment: We assist you in assessing potential risks associated with your role as a director.
  • Strategic Guidance: We provide tailored strategies to mitigate these risks and safeguard your financial interests.
  • Legal Counsel: In complex situations or when facing allegations of wrongful business practices, we connect you with legal experts who specialise in corporate law.


While limited liability is a fundamental concept for directors of limited companies, it is essential to recognise that personal liability can arise in specific circumstances. GMD is your trusted partner in identifying, understanding, and mitigating these risks. We are dedicated to helping you navigate the intricate world of corporate governance, ensuring your peace of mind and protecting your financial well-being.

Have a question? We're here to help.

Simply either give us a call on the number below or fill out the form and we'll be back in touch as quickly as we can.