Am I personally responsible for the debts of my business?

Whether you are personally responsible for your businesses debts depends on the type of business structure you have and whether you have personally guaranteed any of the debt.

• Sole trader

Yes, you are personally responsible for all the debts and liabilities of the business because, legally, there is no separation between you and your business.

• Partnership

Yes, in a traditional partnership, all partners are personally liable for the debts of the business. However in a limited liability partnership (LLP) partners are likely to have limited personal liability which is limited to the amount of money invested in the LLP.

• Limited company

Generally, no. A limited company offers protection from personal liability.

Personal guarantees

Regardless of your business structure, if you personally guarantee a loan, debt, or business supply