It’s hard enough for small businesses at the present time to obtain credit from banks and trade suppliers. so, if you’re a small company or an accountant in practice with SME clients, don’t take actions that only make things worse.
Many established private businesses have been tempted to register themselves as limited liability companies in the last few years. I say tempted because recent government legislation has meant that small limited companies don’t have to file too much in the way of financial information at companies house anymore. The trouble is, by doing so, good credit histories can be lost!!
I came across a case the other day when Graydon was asked by a computer distributor why his credit rating had gone from 50, 000 GBP per month to 1000 GBP. We looked it up on the graydon database to discover that his partnership (which did enjoy a 50k credit rating for many years) had recently ceased to trade as a partnership and had registered as a Ltd company. Being a different legal entity,his whole excellent credit history was lost at a stroke.
OK, when he told us his tale, the key man at the business was pleased to see that Graydon could do something about it. However, it strikes me that in these circumstances it would be much better if a newly incorporated company was able to publish this simple fact at Companies House upon registration or placed maybe in the principal objects e.g “the business was established with principal objects to continue a long established business trading under the name of John Doe Computers at 16 the Mint, Reigate”
At least then the public and credit agencies could be proactive in dealing with this issue rather than left in the dark to the detriment of the business concerned. Has anyone been affected by this?
The second largest improvement in ‘significant’ levels of financial distress since the EU Referendum was in professional services, found research from Begbies Traynor
Steve Absolom and Will Wright from KPMG Restructuring have been appointed joint administrators to City Motor Holdings and associated companies
Partners from Johnston Carmichael have been appointed as joint administrators to Axon Well Interventions Products UK
Begbies Traynor have been appointed administrators of William Anelay Ltd, York, one of Britain’s longest-established construction and heritage restoration companies