Yes, a director can be personally liable for company debts in certain situations, although a company is generally treated as a separate legal entity, and its debts are usually the responsibility of the company itself.
Key points:
General rule: Directors are not personally liable for the company's debts simply because they are directors.
Exceptions: A director may become personally liable if:
They have personally guaranteed a loan or financial obligation.
They are involved in fraud, misrepresentation, or wrongful conduct.
They misuse company funds or breach their fiduciary duties.
They continue business with fraudulent intent or in violation of applicable laws.
Statutory liability: Certain laws may impose personal liability on directors for specific defaults, such as non-payment of taxes, statutory dues, or other legal obligations, depending on the facts of the case.
Limited liability protection: In most cases, the company's creditors can recover debts only from the company's assets, unless there is a legal basis to hold the director personally responsible.
Court proceedings: Whether a director is personally liable depends on the evidence, the applicable law, and the findings of the court or relevant authority.
