Is is true in reality that a directors own credit rating can be affected by company circumstances and liquidation (assuming no personal guarantees)? Or are you talking about the company specifically?
So let us imagine that I am a sleazy jerk that deliberately runs up debts with no intention of paying them off. To do this, I launch a series of shell companies and create a credit carousel and in doing that, one of my bogus companies looks healthy and I sucker in some suppliers and sell them goods and services to the value of, say, £100,000.
I liquidate the company, strip out all assets and turn my trouser pockets out and tell them and the courts that there is no money to be had. Boo-hoo, sob, sob.
Now I phoenix one of these companies, or start a new one, and I approach you for supplies. You, being a reasonable and intelligent person, look me up and lo-and-behold, you see a string of dormant or dissolved companies and even a forced liquidation by the courts.
Although I personally am not responsible for the debts of those defunct companies, you would have to be stark-raving bonkers to give me two-and-sixpence in credit.
There are three important aspects to this whole issue -
1.
Sensible people will check your history! If you run up debts and then liquidate your Ltd., (SpongeBob plan or whatever wheeze you pull) no supplier that has an ounce of sense will ever give you credit again. Even your very presence as a shareholder in another company will poison that company and destroy its credit.
You personally may be able to buy a new car on the never-never or get a mortgage, but you will have a long, hard battle to get back any believability as a business person.
2.
Check their history as company directors! If you fail to check, you only have yourself to blame! My grandfather always used to say that instead of punishing criminals, we aught to be punishing the victims for stupidity. A bit harsh perhaps, but there is more than just a grain of truth in that (and was used by Collodi in his story 'Pinocchio' - the gorilla judge sent Pinocchio to prison for being duped by the fox and the cat).
If you lend money (i.e. supply on credit) to a company or individual, check their history! Look them up in DueDil or one of the dozens of other company check sites. If they have had a string of companies, some of which have been liquidated, dissolved or otherwise vanished, or if they have recently created a string of companies that have not yet filed any accounts, or otherwise look a bit dodgy - AVOID THEM AT ALL COSTS (or at least just supply on a cash-in-advance basis).
I realise that there may be many on this forum that will feel attacked by those words. They think that hiding behind the Ltd. formation is a legitimate business tool and stringing people along in the hope (against hope!) of getting some money down the line is a legitimate negotiating tactic.
It isn't. It is a crime. It is fraud.
The problem is, that the police, the prosecutor's office and the courts have become far too lax in enforcing the law. As long as the potential defendant went through some nominal attempts at turning things around, they throw their hands up in the air and say "Oh well, it is just too hard to prove fraudulent intent!"
That is arrant nonsense and just bloody-minded laziness on their part. Lying, cheating and stealing has now become institutionalised as a result.
3.
ACT QUICKLY! Never ever allow the grass to grow under your demands. The very moment that a debt is in default, letter before action, followed by action and without ANY delay.
GET IN THERE FIRST!!!
Time and time again, experience shows that if you act quickly, you get paid. If you are stupid enough to be fobbed off with silly sob stories, excuses and/or sudden complaints about the product or service provided, you go all the way to the back of the queue and will get zilch.
These dead-beats will pay you, if you act swiftly and with no deviation or remorse.
Why?
Because they are doing the exact same thing to dozens of others that they have not told you about! HMRC, rent, utilities, other suppliers, leasing agreements, car payments, even wages, you name 'em and they'll be in massive arrears.
They will need to keep you quiet, so as not to alarm all the others. The only way they can do that successfully is to pay you!
