Sirji, What is the legal position of personal liability of a director of a private limited company wherein the said company has unpaid VAT liability but at the same time the said company has gone into losses and about to quit the business and has no assets to pay the said VAt liabilities.
thanks
All the directors on the date of submission for closure papers to ROC are liable to all the penalties and payments. The person with whom the board of directors entrusted the responsibilities for submission of papers, return and payments will also listen the legal music.
In case the company does not have enough resources/funds to pay, the directors needs to pay from their personal pocket unless granted amnesty under some govt. scheme or the Sales Tax Commissioner, which is rare in these cases. The company will also not get any refund of security and payments and banks further may be called to seize the account of company and directors, until satisfactory replies are filed and reviewed.
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