Spotting Rapid Succession Companies And Directors
Our latest product release transforms how you identify and mitigate risks associated with Rapid Succession companies and directors. Watch the webinar below to find out more and see the tool in action on our online platform.
Rapid Succession is the rapid movement of incorporation(s) either prior to or following insolvency action against a company where the new company or companies are linked to the company that experienced insolvency action by one or more common directors. Although the population of companies that meet these criteria are legitimate and of no legal concern, the population also includes legitimate phoenixisms (if incorporated and operated in accordance with the law), and a subcategory of illegitimate phoenixisms where the applicable law has not been followed or where the director(s) intend or intended to commit fraud.
Despite facing severe setbacks, these companies manage to revive themselves and start afresh. Just like the mythical bird after which they are named, Phoenix companies demonstrate resilience and adaptability. They undergo a process of Rapid Succesion, where they shed their old debts and liabilities through liquidation or administration and re-emerge as a new entity. This allows them to continue operating while leaving behind their troubled past.
While Rapid Succession companies may seem like a symbol of hope and rebirth in the business world, they actually pose a significant risk to the UK business landscape.
The process of Rapid Succession, where a company sheds its debts and liabilities through liquidation or administration, may allow it to start afresh, but it also creates a loophole that can be exploited. Some unscrupulous individuals misuse this process to deliberately evade their financial responsibilities, leaving behind a trail of unpaid creditors and frustrated stakeholders.
This not only undermines the integrity of the business landscape but also puts legitimate businesses at a disadvantage. Moreover, the ease with which Rapid Succession companies can re-emerge makes it difficult for regulatory authorities to keep track and prevent repeat offenders. As a result, the UK business landscape becomes vulnerable to fraudulent activities and the potential for a cycle of insolvencies.
This is where Company Watch can help.
Our advanced director matching tool, Aphrodite®, uses the latest in machine learning to help you find company directors with a hidden history of insolvency in seconds.
Aphrodite® sorts through millions of registered directors and automatically matches profiles that the same person may have created. This saves you hours of painstaking work and leads to far greater confidence when conducting business. After all, confidence is key.
By spotting Rapid Succession companies and directors at an early stage, you can refuse to extend them credit, avoiding potentially catastrophic debts down the line.
We don't make your decisions for you. But our financial risk solutions arm you with the confidence you need to ensure that whatever decision you make is the right one.
