I've had a tentative query from one of my clients who is thinking of selling his Ltd Co. It's worth (my estimate) between 10-15k and it has a bbl of 10k.
His query is, if he was to sell the business with the BBL included, and the new owner, for whatever reason, didn't complete paying off the BBL, would he be liable, given he was the Director at the time the loan was taken out?
Replies (4)
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I would expect this would be detailed in the loan agreement.
That said...
I have just scanned through three clients' BBL terms (Santander). I can see no specific reference to director's liability (but then, a BBL for - in your case £10K - was loaned without personal guarantee). However, their standard terms* state the following:
Events of Default:
(g) the control of the Company is transferred from its present proprietorship to any other person, persons or corporate body, without prior Consent
Clearly, as this is a standard term of this lender (and pretty much any loan agreement I have ever seen) I suspect the lender has already been approached, that transfer and assignment has been considered/ accepted, and that my reference is merely 'stating the bleedingly obvious' - for which, I apologise in advance!
* Reference is to standard terms (checked on 3 agreements for 3 clients), is not personal to my client, and is not, therefore, sensitive or confidential info
+1
had not yet considered it
Usually company loans and overdrafts have guarantees that need sorting as part of tranfer arrangements
At such low figures, It would not surprise me if bank insisted on repayment. Their costs of collection before claiming on a default from HM Gov would be disproportionate