Directors who dissolve companies to write off debts, only to start up near identical businesses shortly after, could be banned and fined under new regulations.
The government has moved to crackdown on so-called ‘phoenix companies’ as part of a raft of changes intended to protect employees and pension holders when companies are shut down.
Retail tycoon Mike Ashley has been quick to position himself as champion of the high street after buying House of Fraser out of administration. But whether suppliers, pension holders and even landlords will be celebrating the takeover is questionable.
The Sports Direct owner snapped up the struggling department chain for £90m just an hour after entered administration last week, vowing to keep open at least 80% of its UK stores open.
Read more: House of Fraser ‘Rescue’ a Hostile Takeover for Suppliers
The government’s much-vaunted ‘Northern Powerhouse’ may have turned out to be little more than a catchy phrase scribbled down on the back of a Chancellor’s fag packet. But at least contractors and small suppliers operating in the North of England’s biggest cities are more likely than most to get paid on time.
In a survey carried out by FreeAgent, small traders in Manchester reported the lowest rate of late payments nationwide. According to the findings, 86% of invoices issued by freelancers and microbusinesses in the city are paid by the due date - which compares very favourably to the national average of 52%.
More than a quarter of UK businesses have suffered negative consequences from another company becoming insolvent in the past six months.
A survey carried out by R3 revealed that one in 10 businesses have suffered a ‘very negative’ impact from a customer or supplier becoming insolvent since the start of 2018, while another 16% reported a ‘somewhat negative’ effect.
The figures come after a sharp spike in the number of companies being declared insolvent in the first quarter of this year. Led by the high profile collapses of Carillion, Toys R Us and Maplin, the number of insolvency cases rose an alarming 13% from the previous quarter.
Read more: Insolvency Domino Effect Strikes Down One in Four UK Companies
