Yesterday I met a person with a sad story. This man was a director of a private company. He was an employee and did not own shares in the company. The company needed some cars, the company leased the cars and he signed the paper work, including a personal guarrantee.
Later on, he decides to leave the company. The other people involved, the owners liquidate the company and give the cars back to the finance company. The finance company sold the cars and there was a $50,000 short fall.
Guess who they are coming after now? My poor friend who did not understand what he was doing.
So please make sure you understand what you are doing or get legal advice. Paying a few hundered $ in legal fees could have saved him $50,000 and a lot of grief.
Terryw
Discover Home Loans
Parramatta
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terry,
Very appropriate advice. I was reading an article the other weekend and it was discussing a company that provided contracting services to major companies and overextended themselves and eventually went into liquidation with massive unpaid PAYG tax liabilities.
One of the employees had been working for 13 months with the company when they asked him to become a director. Well guess who is now being chased by the ATO for these substantial debts. The director.
Very apt.
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