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Did either of the directors personally guarantee the loan in the loan agreement or did it otherwise mention personal liability,?
Neither director personally guaranteed the loan. I was wondering given the circumstances is there any part of the law where I could hold him personally liable as one director is happy to repay the loan in full.
Thanks for your question.
Where a loan is not personally guaranteed by directors they can only be held personally liable in certain circumstances. Things like where they acted outside the authority granted to them under the companies articles of association or where they are guilty of fraudulenty trading.
Unless their articles have been altered they will have authority to take out the loan and I cannot see that there is any element of fraud here in that it is not denied that the loan is legally binding. I'm afraid that the solicitors are right and that the company is the true and only defendent in this matter.
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