PLC & Liability and Attachment Problems

A PLC is a private limited company. The name already suggests that as a rule liability is restricted to the company’s assets and extending liability to the private capital of members is only possible in exceptional cases. For instance, when one or several members declared themselves jointly or severally responsible.

If a PLC is in a state of insolvency or facing excess indebtedness, the manager is obliged to apply for insolvency arrangements within the following 3 weeks. Failing to do so implies that he is stalling insolvency and as such committing a punishable offence. In such cases the manager may personally be held liable for deliveries and services provided to PLC verging on insolvency.

Based on the large number of PLC’s that are in a state of insolvency it is certainly recommended, prior to concluding contracts, to obtain information about the company concerned to minimize the financial risks.

Such Information can be obtained from the Business Information Service of Zyklop Inkasso Deutschland GmbH.