Are you liable for your business’s debts?

It’s easy to think that business debts are distinct from those which individuals incur but the line between personal and business liabilities is not as clear cut as it may seem.

Personal debt is often reported in the press as consumer debt relating to personal loans, payday loans and credit cards but sometimes business debts can fall to be paid by individuals.

If you are a sole trader or an unincorporated partnership the liabilities of that business ultimately fall on your shoulders. If the business has cash flow issues, underperforms or ends up in formal insolvency, creditors can pursue their debts against the individuals who traded that business.