Alarming rise in business owners running away from their debts

Chasing up the mystery of the disappearing business owners

When a sole trader decides to retire they will let their customers know, pay off their creditors, settle outstanding tax bills and dissolve the business in an orderly manner contacting Companies House to strike it off. That’s assuming they don’t sell it or hand it over to someone else to run.

ICSM Credit have identified a new breed of dodgy business owner – the ones that simply walk away from their liabilities without explanation.

Paul Carrotte of ICSM credit said he had come across an increasing number of cases where the owner of an ailing firm who was heavily in debt simply disappears.

He said: “They don’t reply to emails or phone calls. They vacate their place of business and leave no forwarding address leaving creditors high and dry. When creditors make enquiries at companies house in some cases they find the company has applied to be struck off. If they owe money that is illegal – and creditors can object to a firm attempting to dissolve itself.”

Companies House states that a company may not make an application for voluntary strike off if, at any time in the last 3 months, it has traded or otherwise carried on business; changed its name; engaged in any other activity except one which is necessary for the purpose of making an application for strike off or deciding whether to do so (for example, seeking professional advice on the application or paying the filing fee for the strike off application); concluding the affairs of the company, such as settling trading or business debts; complying with any statutory requirement; made a disposal for value of property or rights that, immediately before ceasing to trade or otherwise carry on business, it held for the purpose of disposal for gain in the normal course of trading or otherwise carrying on business

A company cannot apply to be struck off if it is the subject, or proposed subject, of: any insolvency proceedings such as liquidation, including where a petition has been presented but has not yet been dealt with; a section 895 scheme (that is a compromise or arrangement between a company and its creditors or members)

Any interested party can object to a company’s application to be struck off the register and dissolved.

An objection can only be considered by the registrar once notification has been published in the Gazette showing the registrar’s intention to strike the company off the register at the expiration of 2 months. It is important to send any objection to the registrar at the earliest opportunity after publication of the Gazette notice and at least two weeks prior to the notice expiry date.

For details about ICSM Credit call 0844 854 1850 or visit the website or email Ian at on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

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