Does company liquidation affect my credit rating?

If you considering putting your company into Voluntary Liquidation, it is likely you will have concerns about the potential impact, as a director (or shareholder), of these insolvency proceedings on your personal credit rating.

Directors & Shareholders are not personally liable for the debts

As a general rule, directors and/or shareholders are not personally liable for the debts of their company. This is the main reason why directors and shareholders incorporate limited companies, limiting their liability should the company be wound up.

If a company is placed into liquidation then this is not documented on a director's / shareholder’s personal credit reference file held with Experian, Equifax, etc. Their credit history is a listing of all the financial dealings that they have had personally and in general, won’t include any debts or legal Judgements of their company.

Separate Business & Personal Credit Reports

Individuals and companies have separate credit ratings. Therefore, your company's credit score, will not, generally, have an impact on you personally.

Liquidation is different from bankruptcy

It is worth noting that liquidation is different from bankruptcy. Bankruptcy is a insolvency procedure for individuals (not companies). In bankruptcy a court can take charge of your assets and use them to pay off your creditors (people you owe money to).

Entering personal bankruptcy can have a serious affect on your credit rating.

If you thinking about liquidation, it is important you get the correct advice as early as possible to limit any possible adverse effect on your personal credit history.