Insolvency in its simple sense means that a business is unable to pay its debts as and when they fall due. Two tests exist to show insolvency and any one of them can be used by the Court to prove insolvency:
This can be evidenced by:
A liquidator or administrator has a statutory duty to report to the Insolvency Service on the conduct of every director of companies that are the subject of insolvency proceedings (company voluntary arrangements excepted). The Insolvency Service then considers whether the conduct of the director warrants disqualification which can be between two and 15 years.
Generally 'no' unless you have given personal guarantees, usually to banks or finance companies. However if a director breaks the law he/she can be personally liable for wrongful trading or break of duty (relatively recently identified in the Companies Act).
As a director you are collectively responsible for the actions of the board of directors even if you dissented from a decision. It is your responsibility to ensure that you are fully informed of the company's financial position. this can be by means of attendance at board meetings and review of regular management accounts and forecasts. If you are in doubt ask questions of your fellow directors. Ultimately if you disagree with your fellow directors the only way toe be sure to avoid personal liability is to resign as a director.
Actions that can be taken against directors can be summarised as follows:
The short answer is to seek professional advice, the longer answer varies depending on your circumstances but consider the following: