Why you need to check for phoenix companies and disqualified directors

The world of business can often be one of closed doors, meetings for the privileged few, and information purely for those in the know. It can be a cut-throat world, and as such, it’s important you’re as clued up as you possibly can be. If you’re a small business owner or a company credit controller, it’s especially important you’re in the know when it comes to extending credit.

In the current economic climate, as we are all too aware, money is in short supply. Lenders are tightening their purse strings and being much more stringent when it comes to handing out loans and credit cards. What’s more, on a personal level, if you’ve recently had reason to check your credit file you’ll know how mud sticks. Miss a payment and it’ll go down on your record, there for anyone who needs to check your credit history to see. These checks are important – just as they are in the business world too.

If you’re in the position of extending credit, it’s vital you make some checks first. Two very important things to check are whether a business is a Phoenix company, and/or if it’s being run by a disqualified director.
What is a Phoenix company?

If a business has failed, a phoenix company can be set up by moving the assets of a particular limited company to this new legal business. Often, a phoenix company will have a very similar name to the company that failed and it will operate in the same industry as its forerunner. Phoenix companies are completely legal, however, if you’re in a position of lending money it can be wise to consider the fact of what has gone before. If there is history of failure and the business is fundamentally flawed and you can’t see any significant changes in the way things are being done in the new company, it probably isn’t a wise idea to invest. If, however, the phoenix company and its director(s) can prove how things have changed, what measures have been implemented in order to avoid the same fate, then the risk will probably be somewhat less. Either way, it makes fundamental business sense to ensure you have all the knowledge about the business you may be investing in and its past history.

If you are concerned about the legality of the phoenix company being run by the same director whose previous business failed, don’t be. This is perfectly legal unless for any of the following instances:

1. The director is personally bankrupt
2. The director has a bankruptcy restriction order
3. The director has a disqualification order
Disqualified Directors

Directors may well be at the top of the chain in the business world, but it doesn’t mean they’re untouchable. If they fail to meet their legal responsibilities it is entirely possible for them to be struck off and become disqualified from working as a company director. A director is disqualified if a member of the public or an insolvency practitioner informs the Insolvency Service that their conduct as a company director is unfit.

Unfit means –

• The director allows the company to continue functioning even when it can’t pay debts
• Records of company accounts aren’t kept and maintained properly
• The director does not file the company’s accounts and returns with Companies House
• The director uses the company’s money or benefits for his/her personal gain
• The director fails to pay tax that is owed by his/her company

If you are looking to find out whether a director has been disqualified, then your first port of call should be the Government’s website. It is quick and simple to search the register of disqualified company directors and can be done online. Click here for to start your search. This page will also point you in the direction of the bankruptcy and insolvency register across England and Wales, Scotland and Northern Ireland.

Once you’ve checked to see if a company is registered as a Phoenix company or the director is disqualified from working as a company director, you’ll be in a much better place to make an judgement. Transparency is the key here, and with all the information needed available online and provided by , it’s easy to make the necessary checks before you deal with a business which you do not already know.
Search a disqualified director

Alternatively if you want a one-stop-shop to check the probity of a director or uncover a history of failed companies and possible phoenix enterprises, slk-studio.ru lets you run an online full director search on any UK company director. Click here for a director search. The results can list details of disqualifications, other directorships, and failed companies.

See more credit tips and information.

In using this service you agree to the Terms and Conditions

© 2018 slk-studio.ru Ltd

Related pages

rajas bradford manchester roadmidland dry cleanersnobile glasswaretees vetsauto tech sloughbrent cross office furnitureelite cleaning manchestertees valley trailersprovectus groupthorley community centrehapton animal feedsdomeview propertiesemptage hallettflutterbies day nurserymobile mechanic worcesterrgp architectsgordon vets musselburghsala thai hendonwestexe mortgageslemonchasethe gulshan liverpoollituanica ukwelland valley feedsfreeze pro shop edinburghdunbar costumesparkerscarsdhf engineeringhowarth switchgearapple crates ukv12 car salestcs car saleshouse of spice watlingtonthaal darfieldhorseferry house horseferry road london sw1p 2awm2m ltdspilsby motor sparesaerocom metalsthe cotswold tailorqib uk plcardley tipgosport furniture shopkelvedon lotusgcs car salessowerbys holidaycalcluth & sangstercramlington car partscds superstoresshortwood business parkprofiles recruitment farnhamlittle muminsashvale farm shopsmith francis tools ltdairedale motorsluxury timepieces uk ltdgatton manor memberstattoo removal cardiffcee norm ukamersham and chalfont hockeyvalour financial managementkd sheds ltdthai massage in leicestersandy thain inveruriemcl flooringmenorca tourist information centrechancery partnershippeak toolmakersfrankby motorsvalentinos bingleyuk car spray croydoncurry hut market deepingmayflower taxi billericay essexinterlet propertyeastend sawmillshulley road garagejj taxis northwichlangley alloys ltdboxing clubs in milton keynesvikings canterbury used cars