Attention ALL Company Directors
Advice for Directors
The number of businesses in Administration soared by an unprecedented 39% in the first financial quarter of 2009 compared to the same period a year ago. ( Source : Insolvency Service. Official Office ).
The number of Companies being sued in court for non-payment of accounts has rocketed by 500%. In the last two years according to a study by the Credit Management Research Centre at Leeds University Business School. Professor Nick Wilson said “ Firms are under a great Deal of pressure. The prospect of a significant rise in corporate insolvencies is now a firm reality ”. 2008.
It is widely accepted that in 2009 business failures will be the highest since the dot com bubble burst. This trend will continue throughout 2010 and the Retail, Construction and Transport logistics will be most affected. (Source : BDO Stoy Heywood Industry Watch 16th June 2008).
The ever increasing financial restrictions being placed upon Companies by banking institutions in their efforts to retrieve some of their heavy losses that they have incurred during the “Buy now pay later, easy lending” periods are now coming home to roost.
Banks are reluctant to lend on an unsecured basis. Overdrafts linked to Directors properties are being reduced in line with the decrease in equity values which are being experienced throughout the UK. Companies are consistently unable to pay their own accounts due to slow paying debtors.
Directors must monitor their Sales Ledger and be mindful of how much they can afford to lose before it affects their Balance Sheet. A £50,000 loss against a gross profit of 10% means turnover would have to increase by £500,000 to retrieve losses. Not easy in these turbulent times.
Should a Creditor Petition for the Liquidation of a Company or, the Company file on their own behalf, will result in the intervention by the Official Receivers Office. The Liquidator has a duty to inspect and investigate the affairs of the Company and report any offence committed under the : Company Directors Disqualification Act 1986.
Click to contact Simon Ashby at Inspired Performance or call 01590 675191
