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Trading companies ability to pay

Comment 13th August 2010

The ability of companies to fund there activities and purchases needs to be further enshrined. Too many companies are funding there activities from the use of other peoples and companies supply of goods and reselling them before being able to pay or even not paying for the goods.

A limitation of money owed  to turn over ratio is required and to go above this level director guarantees must be given, or external funding from banks or investors agreed.

 Failure to comply can then be used as a reason to remove limited liability, or the striking of of directors from running companies in the future or ownership.  

Why does this matter?

Too many companies are not financially sound and take goods and services from others without the ability to pay, or no intension to pay

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