3 ms·

Is this a limited company? Seems pretty fucked. I don't know what the usual legal proceedings are to declare bankruptcy, but this is why they have bankruptcy l

by swombat 16y ago

Is this a limited company? Seems pretty fucked. I don't know what the usual legal proceedings are to declare bankruptcy, but this is why they have bankruptcy laws and limited company. Speak to a bankruptcy lawyer. Presumably all of this is your company's debt, not your own personally, and you have not committed fraud or done anything illegal, so hopefully you're in the clear personally. It may even work out that your cofounder is the one who ends up with a black eye on his credit record if he's the majority shareholder and ends up being the person named in the bankruptcy. You haven't specified what country you're in. I'm guessing US. From the little I know, bankruptcy protections are pretty great over there. In the UK, if you take a company that you're a director of bankrupt, you aren't allowed to be director of another company for 5 years.

debtscrewed 16y ago
It is a limited company, and it's registered under a Delaware C-Corp. I'm not familiar with the details of bankruptcy either. Will this damage my name and the name of the company? Well, I'll probably be the guy named in bankruptcy, since my cofounder is in the UK. Yes, I am in the US. Ouch, that sucks, see directly above.
- rwhitman 16y ago
  You should edit your post if you can to mention that its a C-Corp. From what I know the C-Corp should be protecting you from personal liability, but I'm sure other commenters here have more expertise
  - enjo 16y ago
    Just for reference: The C-Corp does provide a pretty heavy liability shield. However, alot of these contracts where likely personally guaranteed. It's nearly impossible to open a merchant account for a young company without personal guarantees from the principles. The lawyer likely required personal guarantees on the retainer as well. It's part of doing business really. Creditors really don't like corporate protection (for obvious reasons) so it's pretty easy to get yourself into a situation that they're seeing... although the high number of charge-backs is something of a head scratcher.
- deleted 16y ago
  [deleted]

by swombat 16y ago

debtscrewed 16y ago

It is a limited company, and it's registered under a Delaware C-Corp. I'm not familiar with the details of bankruptcy either. Will this damage my name and the name of the company? Well, I'll probably be the guy named in bankruptcy, since my cofounder is in the UK. Yes, I am in the US. Ouch, that sucks, see directly above.

rwhitman 16y ago
You should edit your post if you can to mention that its a C-Corp. From what I know the C-Corp should be protecting you from personal liability, but I'm sure other commenters here have more expertise
- enjo 16y ago
  Just for reference: The C-Corp does provide a pretty heavy liability shield. However, alot of these contracts where likely personally guaranteed. It's nearly impossible to open a merchant account for a young company without personal guarantees from the principles. The lawyer likely required personal guarantees on the retainer as well. It's part of doing business really. Creditors really don't like corporate protection (for obvious reasons) so it's pretty easy to get yourself into a situation that they're seeing... although the high number of charge-backs is something of a head scratcher.
deleted 16y ago
[deleted]