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Q. Liability of a Director

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Anonymous

posted 5 months ago

Q.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?

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Prodyut Banerjee

Experience: 11 Year(s)

Responded 5 months ago

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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.

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Shreyash Mohta

Experience: 1 Year(s)

Responded 5 months ago

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A. ) YES

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Kishan Dutt Kalaskar Retired Judge

Experience: 33 Year(s)

Responded 5 months ago

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A. ) Dear Sir,
Normally each Director will be held liable for repayment of loan, be careful before signing the documents.

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Suneel Moudgil

Experience: 15 Year(s)

Responded 5 months ago

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A. ) Yes, you would be equally responsible for payment of debt

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