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Thomas, Lawyer
Category: UK Law
Satisfied Customers: 7617
Experience:  BA (Hons), PgDip, Practising Solicitor
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I made a loan to a limited company ( 20,000) which has two

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I made a loan to a limited company (£20,000) which has two directors. The two directors are now in dispute on an unrelated matter. One director has agreed to repay the £20,000 and has even written out a cheque. The other director is refusing to sign the cheque/repay the loan as part of their dispute. I have issued court proceedings against the company (1st defendnat) and made the other director (the 2nd defendnant). His solicitors have claimed my proceedings have no merit as the loan was made to the company and thus I shoudl withdraw my claim against him. I accept he is hiding behind the mimited liability status but want to know if I can continue my claim against both the company and him. Thanks



Did either of the directors personally guarantee the loan in the loan agreement or did it otherwise mention personal liability,?



Customer: replied 6 years ago.



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.


Sorry it could not be better news.


If this is useful please kindly click accept so that I may be rewarded for my time. You will be free to ask follow up questions.

Kind regards,


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