businesses going 'bust' then starting again.

Banjo String

The amount of businesses I've dealt with that have folded, yet get reincarnated almost immediately is astonishing lately.

Companies that seem to max out the credit accounts of their various suppliers, then subsequently 'fold' due to 'financial difficulties' yet start up under different guises is disgraceful imo.

Think about it, if we as individuals fall into arrears with a loan/credit card/mortgage etc, it affects our credit ratings negatively. As a result, we may find it difficult to obtain credit or finance for (I think) six years.

I think they should close whatever loopholes exist to prevent irresponsible businesses abusing them.

IM0

its a bit like going bankrupt without any of the negatives

its mental!

Banjo String

IM0 wrote: »

its a bit like going bankrupt without any of the negatives

its mental!

Some of them are so blatant about it it's unreal.

Simply swap a letter out two around.

JD services (fictional company) becomes DJ services. Same phone numbers etc.....

buried

This is a huge problem that is not highlighted at all by mainstream media. One of these rackets has set up lately in competition to my business and I know for a fact this new company is paying none of its suppliers just like the previous enterprise that it masqueraded itself as a business. These 'companies' cut the prices down to ridiculous non-competitive levels as they pay no suppliers and whats even worse, Government agencies such as 'Enterprise Ireland' constantly give huge grants and supports to these scumbags to start these scams, without taking into account the damage these folded and reincarnated companies do to legitimate, honest businesses that have existed and been compliant for decades.

Lando Griffin

SamHall wrote: »

Some of them are so blatant about it it's unreal.

Simply swap a letter out two around.

JD services (fictional company) becomes DJ services. Same phone numbers etc.....

I need a DJ for my birthday this weekend, is he any good?

BuzzFish

There are a few though that are doing this for a fair reason.
I know an accountant who has been in business for a long time. Many of his clients were tradesmen and the such and when they went bust, he never got paid. This has spiraled out of control and his business is now left with huge debts also.

Folding the business and starting again in this case, in my opinion, is fair enough. He has always run his business well and has been very professional, but due to circumstances outside his control the business suffered. He deserves to be able to rebuild his business, learning from his mistakes (in giving credit for too long!) and hold onto the people he employees..... rather than just fold and end up with nothing.

kneemos

Local suppliers only get burnt once,someone who doesn't pay quickly gets a reputation as such.

Jake Rugby Walrus666

It's not just suppliers. You can fold leaving staff unpaid and owing money to sub contractors or other business partners.

Some people take that sort of thing very personally. People can do crazy things over money.

Dyr

There's a chinese down our way that was closed by the food safety authority last week. It's open again now, looks as manky as ever. How the hell did that happen?

Banjo String

Bambi wrote: »

There's a chinese down our way that was closed by the food safety authority last week. It's open again now, looks as manky as ever. How the hell did that happen?

Probably still haven't cleaned it.

Richard Hillman

It happens a fair bit in football too. Cork City Foras Co-op City being one of them. Shamrock Rovers paid about 4% of their debt after they went into examinership. A lot of normal people lost their jobs because of this.

blackwhite

SamHall wrote: »

The amount of businesses I've dealt with that have folded, yet get reincarnated almost immediately is astonishing lately.

Companies that seem to max out the credit accounts of their various suppliers, then subsequently 'fold' due to 'financial difficulties' yet start up under different guises is disgraceful imo.

Think about it, if we as individuals fall into arrears with a loan/credit card/mortgage etc, it affects our credit ratings negatively. As a result, we may find it difficult to obtain credit or finance for (I think) six years.

I think they should close whatever loopholes exist to prevent irresponsible businesses abusing them.

buried wrote: »

This is a huge problem that is not highlighted at all by mainstream media. One of these rackets has set up lately in competition to my business and I know for a fact this new company is paying none of its suppliers just like the previous enterprise that it masqueraded itself as a business. These 'companies' cut the prices down to ridiculous non-competitive levels as they pay no suppliers and whats even worse, Government agencies such as 'Enterprise Ireland' constantly give huge grants and supports to these scumbags to start these scams, without taking into account the damage these folded and reincarnated companies do to legitimate, honest businesses that have existed and been compliant for decades.

If you feel that there was no intention to pay suppliers then report them to the Director of Corporate Enforcement.
If there wasn't a genuine effort to run the business properly then the Directors can be convicted of reckless trading offences, and disqualified from serving as officers of Companies for a number of years. That would prevent them setting up anything new for a while.
The Directors can also be made personally responsible for some or all the debts of the failed business (doesn't often happen in reality though).

BuzzFish wrote: »

There are a few though that are doing this for a fair reason.
I know an accountant who has been in business for a long time. Many of his clients were tradesmen and the such and when they went bust, he never got paid. This has spiraled out of control and his business is now left with huge debts also.

Folding the business and starting again in this case, in my opinion, is fair enough. He has always run his business well and has been very professional, but due to circumstances outside his control the business suffered. He deserves to be able to rebuild his business, learning from his mistakes (in giving credit for too long!) and hold onto the people he employees..... rather than just fold and end up with nothing.

Accountants (along with a number of other professions) are currently screwed over by Irish legislation. An accountancy practice (audit or accounting services) must be run as either a sole tradership or as a partnership. This means that the principals of the business (the owners/partners) have full personal responsibility for the debts of the business. If the business fails, even through no fault of their own (like your friend above), the only way that the business debts can be removed is by paying for them from personal assets (i.e. sell your home, etc.) or through personal bankruptcy. No limited company protections available.
Add to this that many professions have restrictions in place preventing previous bankrupts from owning/running a practice. This means that bankruptcy can also severely restrict their ability to earn a living in the future as well.