Ban For Director of Child Homeware Business
Ban For Director of Child Homeware Business
A businesswoman who allowed a pushchair and pram company to take money for goods that it could not deliver has been disqualified from acting as a director for five years.
Paula Anne Williamson from Rochford in Essex has given an undertaking that she will not act as a director of a limited company until September 2021. Such a disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot: act as a director of a company; take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership, or be a receiver of a company’s property.
Ms. Williamson’s disqualification comes in the light of an investigation by the Insolvency Service which discovered that between August 1st 2015 and late October 2015 she had caused Zebedee Limited to continue to take customer monies and deposits for goods which it had “no reasonable expectation of supplying”.
Zebedee Limited ceased trading on October 28th 2015 and DKF Insolvency Limited was appointed to liquidate the company, owing around £131,677 to creditors.
The Insolvency Service said that, due to the fact that Zebedee was becoming insolvent, Ms. Williamson would have known or ought to have known that the goods would not be supplied, causing at least a detriment of £34,010 to customers between the dated period above.
Errant directors damage economic confidence
Gemma Game, deputy head of investigations at the Insolvency Service, said: “Directors who fail to provide goods that have been partially or wholly paid for, or fail to refund those monies to customers, damage economic confidence.”
She added: “Other directors tempted to follow this path should remember that if they run a business in a way that is detrimental to either its customers or its creditors they lose the protection afforded by limited liability. The Insolvency Service will investigate them and seek to remove them from the business environment.”
Ms. Williamson’s actions left scores of local mothers-to-be out of pocket. Katrina Humphreys of Rayleigh in Essex spent £700 for a pram, buggy, Moses basket and car seat. The 24-year-old, who was eight months pregnant at the time, said she was “heartbroken” to discover the shop had closed down.
“They were already bankrupt when I went in on the Friday. They told me their card machine was down and they took cash off me. She obviously knew what was going on,” said Ms. Humphreys.
Late payment is the cause of almost a quarter of insolvencies
New research by trade body R3 indicates that late payment for goods or services was a primary or major cause of almost a quarter (23%) of insolvencies in the 12 month period to August 2016, while the failure of a supplier or customer was the primary or major factor in a fifth of cases.
R3 president Andrew Tate said: “A business can have a great product and great staff, but if it doesn’t get paid for what it sells, or if it is over-reliant on one supplier or customer, things can go wrong very quickly.”
Late payment problem is worsening
The research suggested the problem has become worse since 2014, when a study found that late payment was a primary or major factor in 20% of corporate insolvencies.
According to the Insolvency Service, there were 15,958 insolvencies in the 12 month period subject to the research. A previous survey by R3 found that 6% of UK businesses, equivalent to 113,000 businesses, were creditors in an insolvency in 2015.
Appointment of small business commissioner is awaited
In May 2015, Sajid Javid, who was then Business Secretary, announced Government plans for a small business commissioner to tackle late payments. The Department for Business, Energy and Industrial Strategy has said it now expects to appoint the small business commissioner in 2017.
“Unfortunately, Government promises and other initiatives don’t appear to have yet made any real impact,” says R3’s Andrew Tate.
Insolvency and Corporate Recovery
Our insolvency and corporate recovery team is able to offer you that level of expertise at a time when you really need the support to get through potential or current difficulties. To talk to one of our corporate solicitors, call us today in confidence on 01895 207973. Alternatively, you can email us at corporate@ibblaw.co.uk.
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