Gwyneth Paltrow publicity chot for Goop. Pic: Sky News
April’s insolvencies, crypto currency collapse, inflation concerns, and Gwyneth Paltrow’s Goop company could be struck off by Companies House
Due to the Government pouring billions of pounds of subsidies into UK businesses in the form of furlough payments, grants, loans and financial packages the numbers of insolvencies continues to fall.
Companies House said there were 23% few company insolvencies in April compared to the same month last year falling from 1,199 to 925, with an even larger fall from 2019 of 35%.
Ian Carrotte of ICSM said: “It’s counterintuitive as you’d expect there to be a big rise in company failures due to the Government closing down sections of business during the Covid-19 crisis thus denying their markets. But with the Government pumping billions into keeping companies solvent it’s led to a new generation of zombie firms. They exist, don’t make any cash, have been unable to trade and as the market opens up again and furlough payments end, they collapse. It’s not a good situation.”
Crypto currency
Writing for Forbes this week Billy Bambrough reported that crypto currencies had seen a collapse in their value. He said: “Bitcoin, after struggling over the last week in the face of regulatory pressure and environmental concerns, has crashed under $40,000 per bitcoin. The bitcoin price, which started May at almost $60,000, has dropped under the closely-watched $40,000 level after it emerged China was redoubling its crackdown on bitcoin and cryptocurrencies. Meanwhile, other major tokens ethereum, Binance's BNB, cardano and the viral, meme-based dogecoin also crashed back—dragging the cryptocurrency market down by billions of dollars.”
Apart from an understandable cynicism among many people about crypto currencies this recent collapse will have done nothing for their credibility. It seems that the Chinese Government triggered the downturn by instructing banks not to facilitate crypto transactions and warned traders in dealing with them. Although the price of Bitcoin has bounced back to some extent the crypto currency market remains volatile.
Inflation returns
The Office of National Statistics (ONS) has revealed a doubling of inflation in April as businesses began to reopen and energy prices rose along with some retail goods. It rose from 1.5% to 1.5% in April compared by 0.7% in March with an increase since a year ago when the pandemic began.
Higher oil prices have pushed up fuel prices which have a knock-on effect especially for delivery and distribution costs.
According to the ONS rises in clothing and footwear prices along with the increases in gas and electricity have pushed inflation upwards.
The Bank England aims to keep a cap of 2% on inflation although this was breeched in 2017 when it hit 3%. Ian Carrotte of ICSM said low levels of inflation can be a benefit but there are always fears in the business community that the double digit inflation of the 1970s and 1980s could return.
Goop warned
Companies House has threatened to shut down Gwyneth Paltrow’s UK wellness company Goop for failing to file its accounts – for the second time since incorporation in 2011. She set up the firm with Chris Martin of the pop band Coldplay but after their ‘unconcious uncoupling’ she moved to New York where she set up retail stores under the name of The Goop Lab.
In 2017 the firm became dormant in the UK and was issued in 2019 with a compulsory struck off notice if accounts were not filed despite the firm believed to be worth £190m - and despite criticisms for the NHS over its so-called health treatments.
Companies can voluntarily be struck off by applying to Companies House for the usual reason they no longer wish to trade and plan to wind up – sometimes due to retirement of the owners. For Companies House to issue an order to wind up is more serious and suggests all is not right.
Companies House said: “If a company is neither carrying on business nor operation, the registrar may take action to strike a company off the register. The registrar may take this action if he has reasonable cause to believe that a company is not carrying on business or in operation. The registrar may take this view if: he has not received company documents that should have been sent to him; mail that the registrar has sent to a company’s registered office is returned undelivered; the company has no directors.
“Before striking a company off the register, the registrar is required to write two formal letters and send notice to the company’s registered office to inquire whether it is still carrying on business or in operation. If he is satisfied that it is not, he will publish a notice in the relevant Gazette stating his intention to strike the company off the register unless he is shown reason not to do so. A copy of the notice will be placed on the company’s public record. If the registrar sees no reason to do otherwise, he will strike off the company not less than 2 months after the date of the notice. The company will be dissolved on publication of a further notice stating this in the relevant Gazette.”
About ICSM Credit
ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel - while at the moment there's a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach - ask for details from Paul.
For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com 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.
To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com
For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk