How a physical person can become liable for claims made against dissolved company? I'm shutting down my limited company (Ltd) in the UK My accountant advises me to purchase run-off insurance With regards to PI Insurance, that is your decision however this is the main thing that could become a personal liability in the future. We just want you to be fully aware of the situation and possible future implications. I did some reading: https://www.policybee.co.uk/blog/5116/whats-run-off-cover http://www.runoffpi.com/about-run-off-pi-cover-insurance/about-run-off-pi-cover-insurance.html Apparently I can be liable for up to 6 years after dissolving the company. That’s because it can take months or even years for mistakes and latent problems to rear their ugly heads. If it turns out your work is at fault, you’ll have to pay to fix the problem regardless of whether you’re still in business or not. So far it's clear. I just don't understand the following logic: the whole point of limited company (Ltd) is to limit liabilities what is the rationale for me becoming personally liable after the closing down the company? Wiki: https://en.wikipedia.org/wiki/Limited_liability If a company with limited liability is sued, then the plaintiffs are suing the company, not its owners or investors. In my understanding it should be like that: company did some work company is responsible for it company is no more, company is gone why would anyone chase previous owners and employees of the company? (SIDENOTE - I decided to shut down company to limit costs and apparently it is more expensive to shut down than to keep it open)
How much does your company have in assets? When you dissolve the company, and the company has £100,000 in assets that gets distributed to the share holders, then you would most likely be liable up to those £100,000 if problems creep up. On the other hand, if you extracted £100,000 from the company as a loan, then closed down the company, you would also most likely be liable up to those £100,000. If there were no assets, no outstanding loans and so on, you should be quite safe. And of course you might know whether you have done something that you could be sued for.
Raise the question with your employer If you believe that you are an employee and not a contractor then there is presumably something you want from your employer. This may be additional wages and entitlements that you would have or will become entitled to for past or future work respectively. Or you may have been injured and want workers' compensation. Or terminated and you want redundancy pay. Whatever it is, work it out and raise the issue with your employer. You might want to consult an accountant or union to help you. They may acknowledge that you were incorrectly classified and give you what you want. Winner, winner, chicken dinner! Or they may dispute it. If so, you need to follow the dispute resolution processes at your workplace. These typically involve informal discussions, escalating to mediation and then to a workplace tribunal run by the government. You will almost certainly want to consult a lawyer or union to help you - given that you don't know where to start the learning curve is likely to be too steep. In virtually every jurisdiction if people are employees at law they can't choose not to be. in british-columbia the relevant law appears to be the Employment Standards Act although it's not unheard of in edge cases for a person to be an employee under one law (e.g. workers' compensation) and a contractor under another (e.g. income tax). From the linked site: The overriding question is “whose business is it?” Is the person who is doing the work doing it as a person in business for themselves? If you are working "for" your own business you are probably a contractor. If you are working "for" your employer's business you are probably an employee. For example, if you are an accountant with several dozen clients, maintain your own business premises and charge for your advice based on the amount quoted rather than by the hour, you're a contractor. If instead, you have 2 clients, work from their premises at set hours and get paid by the day or week, you're an employee with 2 jobs. In edge cases these are not cut and dried - Google are Uber driver's employees. In Australia: no. In California: yes. In the UK: yes.
All employees in Australia are covered by state-based Worker’s Compensation insurance. This is the workers’ guide for NSW. In theory, your loss of income and medical expenses should be claimable. However, as it seems that you did not follow the required procedures, in practice, you may find it a bureaucratic nightmare. First, you needed to have been seen by a registered Australian doctor and receive a Workers Compensation certificate to get the ball rolling. Do you have evidence that the injury occurred at work? Second, benefits are suspended if you leave the country. There may be exemptions for temporary workers but I am unaware of them. Contact the authority responsible for workers compensation in the state you were injured.
@Rick aptly answers your first question (and I totally agree with his answer including his conclusion that the cited provisions apply to single member LLCs). So, I'll touch on issues associated with your second one. Would there be anything legally wrong with my intentionally wasting the company's money or doing something similarly pointless and harmful to the business, considering I'm the only actual person (as in human, not legal person) who is harmed in any way? If the way you use the money wastefully is considered by a court to be a de facto distribution by the LLC to you, its sole member, and this renders it insolvent (as defined in ORS 63.229 (Limitations on distributions), you could have personal liability for the distribution to the company. See ORS 53.235. Creditors of the company could then garnish that obligation to collect their debts owed to the company from you (a garnishment is technically a right to obtain money or property from someone who owes a debt to a judgment debtor, usually a bank or employer, but not always as in this case). Intentionally wasting the company's money would probably constitute a &quot;fraudulent transfer&quot; on the part of the LLC which could expose you to liability to third-party creditors if those actions left the company unable to pay its debts as they came due, or with assets with a fair market value that was lower than the fair market value of its current and currently anticipated liabilities. This parallel liability would arise under the Oregon Fraudulent Transfers Act and related provisions of Oregon law found at ORS 95.200 to 95.310. If you were anticipating or in the process of divorcing, it could constitute economic waste that could be held against you (treating the wasted assets as if they still existed and were allocated to your in a property division). Likewise, if the waste reduced your income for child support purposes, a court would seriously consider imputing the income you could have had if you had not acting in that matter to the income you actually had, in order to calculate your child support obligation. And, you might be disallowed a deduction for the waste of the company's money, rather than having it treated as an expense, which could increase your income tax and self-employment tax liability. But, to the extent that you are the sole owner of the company, no creditor, spouse or child has rights impaired by your actions, and you don't claim the wasted assets as income tax deductions, there would be no one with standing to complain about your conduct in court.
They fail as a business and the debt passes to another bank. There is a massive banking catastrophe and most banks fail. Companies do not cease to exist because they are in bankruptcy. Typically a caretaker management is set in place (elected either by the borrowers or the judge overseeing the bankruptcy) to avoid the loss of value during those proceedings. Usually a company in bankruptcy has to reduce its operations because it will find it difficult to get resources to continue its usual operations. But it could continue those operations that are still expected to provide a profit. It would not be unusual for the caretaker manager to ask more funds from the borrowers in order to ensure that they do not lose even more of the value of the company. I would say that debt collection is profitable enough to keep it running, at very least to cover the minimal legal requirements so that the debt does not expire. And at the very least, the debt can be sold to a debt collection agency or another bank, outside of the bankruptcy proceedings (then the net value of this sell is what will be passed on to the borrowers). It will give a small profit for the original company, but at almost no cost or risk for them. Also, the debt holder would have no incentive to collect if it was in bankruptcy proceedings and didnt own anything. You are confusing managers with owners. The people deciding what to do are the managers, and even in bankruptcy managers still owe fiduciary duty to their business. In fact, in general there is no need for the manager of the company to &quot;own anything&quot; of the company they manage, yet they have to work to improve its situation. If a manager negligently caused the company to cause value, he could be sued for it. Even if he is not sued, it would look very bad for him when looking for a new job. In any case, this is not different than the shop across the street going out of business. Have you seen any of them putting a sign telling &quot;We no longer own anything, so come here and help yourself whatever you want for free&quot;? No? A credit card company would not do that, either.
It doesn't matter if a debt arises as a result of normal commercial transactions or because of liability for a legal wrong - if you owe money you owe money. While you are alive you are responsible for settling your debts out of your assets as and when they fall due. When you die, your executor has the same responsibility. The executor's first responsibility is to settle the debts of the deceased - only after they have done this can they make distributions to the beneficiaries. One of their duties is to advertise the death of the person and invite anyone who has a claim against the estate (as a creditor or beneficiary) to come forward - the law puts time limits on how long they have to do so. If some of these liabilities are disputed then the executor must hold back enough funds to cover the disputed amount (and the costs of defending against it). Intangible assets (copyright, patents etc.) are no different from tangible assets - they can be offered to the creditor to (part) settle the debt or the can be liquidated (sold) to get cash to settle the debt if there is insufficient cash in the estate. Once all known debts have been settled or successfully denied the executor can distribute whatever assets are left in accordance with the will (or the law if there is no will). If they do all this in accordance with the law then they have no liability. The beneficiaries never have any liability. Sometimes the estate will be insolvent - its liabilities are greater than its assets. The executor's duty in that case is to follow the applicable bankruptcy law.
Your personal liability depends on your state law regarding the family car doctrine, so the answer there is "maybe" (Texas is not a state with that doctrine, so simple ownership of the car does not confer liability). You would be liable if your supervision of the child was negligent, which means approximately that you knew or should have known that she was a bad driver and would cause damage. Still, the insurance company is suppose to indemnify you (plural) against such loses, as long as they are legally required to do so. That would include many considerations, such as whether the driver was covered under the policy, whether the car was being used contrary to the terms of the policy (being used commercially), and so on. The insurance company is entitled to make a reasonable determination of whether they are responsible for the loss (and if so, to what extent). If they actually decline to cover the loss, you would need to sue them to make them comply with the terms of the policy (and your lawyer would give you a detailed explanation of why they are not liable, in case they aren't). The plaintiff works with his insurance company to recover his insured losses, and with his lawyer to recover any uninsured losses. His insurance company works with your insurance company, up to a point, and then the lawyers get involved. Your daughter does not work with his insurance company, and your insurance company probably has said something along the line "only talk to us". The insurance that a driver typically has may cover some of their own medical costs, but does not provide a payment for "pain and suffering": that is an uninsured loss. It is not generally required that drivers carry insurance to cover their own medical expenses – it is required that they insure against damages, in general, suffered by other parties (if the defendant is at fault). So there is probably nothing for the plaintiff to work out with his insurance company. In Texas, if the defendant is entirely at fault, defendant will be liable for 100% of plaintiff's damages. If defendant is 90% at fault, defendant will be liable for 90% of plaintiff's damages. If defendant is 49% at fault, defendant is not liable. Defendant can, in any event, also sue for damages, so if defendant is 49% at fault, defendant can recover 49% of her damages. The insurance companies might be able to talk it out and reach a clear resolution of the matter, but it could be more in their interest to throw the dice and work it out in court. One can always sue at the very start, and drop the suit if it becomes advantageous.
Contractual terms must always be read in context. Given the context, it is unlikely that the term could support the definition that you are worried about. It is clear that the purpose of you appointing the company as your attorney is to allow them to perfect the IP rights you have given them by the other parts of the clause; not to allow them to sell your house or make end-of-life decisions. If you are worried about it, ask them what they mean and ask for the clause to be clarified to your satisfaction.