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Last Updated On 02-Jul-2019
Corporate and Incorporation

Liability of a Director

I have been made director of a pvt ltd co. in 2018 which was incorporated in 2016. I do not have any shares on my name. Now my company is taking a loan from bank for which even I will need to sign on legal documents of bank. If my company defaults payment, will I be liable for the payment of debt? If yes, to what extent?

( Mumbai, Maharashtra )

12-Jun-2019

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A.
The answer is clearly no. You will not be held personally responsible until and unless you have given any personal guarantee/ indemnity. Here Comes the concept "Company is a separate Legal entity". However if the loan is taken for a fraudulent purpose the Corporate veil shall be lifted to see your involvement in the transaction.
Posted On 02-Jul-2019
Vidhikarya
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YES
Posted On 15-Jun-2019
Vidhikarya
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Dear Sir,
Normally each Director will be held liable for repayment of loan, be careful before signing the documents.
Posted On 15-Jun-2019
Kishan Dutt Kalaskar
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Yes, you would be equally responsible for payment of debt
Posted On 13-Jun-2019
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