Director Restriction & Personal Exposure

Section 819 letters, disqualification, guarantees called in, liquidator demands — defence for the director being pursued personally.

When a company fails, the company’s problems end and the director’s begin: the liquidator’s restriction letter, the bank’s guarantee demand, the loan-account claim — arriving together, at the lowest moment, drafted by professionals whose job is recovery. The banks and liquidators have their advisers. This practice exists for the person the letters are addressed to.

Mary Molloy Solicitors are solicitors, not accountants or tax advisers. Nothing on this page is tax, accounting or financial advice — engage your accountant on those questions, and both advisers together where matters straddle the line. Company law procedures, CRO practice and filing deadlines change frequently, and reform of the law governing owners’ management companies and charities is ongoing; confirm the current position before acting on anything here.

The Four Letters

  • The restriction letter: s.819’s default process, answered by evidence of honest and responsible stewardship and cooperation — the director’s guide;
  • The disqualification threat: the serious end, defended on conduct;
  • The guarantee demand: construed strictly, negotiated pragmatically — the guarantee guide;
  • The liquidator’s money claim: loan accounts and challenged payments — reconstructed forensically before anything is conceded.

One rule spans all four: the first response sets the file. Positions taken in a panicked reply — admissions, characterisations, promises — follow the director through everything after. Nothing substantive goes back until the documents have been read.

Compliance Is the Defence

Everything this practice argues after a failure, it recommends before one: books kept, returns filed, minutes recording the hard decisions and the advice taken, creditors’ interests visibly entering the analysis as trouble approached, and early engagement with rescue options while they exist. The directors who survive scrutiny are not the ones whose companies never failed — companies fail for honest reasons constantly — but the ones whose paper shows stewardship. That record is built in the ordinary months, not the final ones: the duties, in plain English. And where the failure traces back to a boardroom at war, the exposure file and the dispute file run together.

A Letter With Your Name on It - Not the Company's?

Restriction, guarantee or demand: bring it unanswered. One call maps the exposure, the defence and the response that doesn't make it worse.

Call 01 5827148

Related Reading

Director Exposure - FAQs

A restricted director cannot act as a director or secretary of any company for 5 years unless that company meets substantial minimum-capital requirements - a serious practical bar for anyone whose livelihood involves running companies. Restriction follows insolvent liquidation as a default process: the liquidator must generally apply unless relieved of the obligation. The escape is statutory: the court will not restrict a director who shows they acted honestly and responsibly in relation to the company’s affairs and cooperated with the winding up. The declaration is defended on evidence - and built or lost in how you respond from the first letter.