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New Business Is Booming In Merseyside

New statistics released by Inform Direct Review of UK Company Formations show an increase in the number of new companies registered in Merseyside in 2016. Figures show that a total of 10,617 new companies were registered at Companies House last year, up 5.5% from 2015. This means that as of the end of 2016, 60,027 companies were registered in Merseyside, making the region 13th in the ranking of counties in England were newly formed companies were set up.

Although the region still trails behind both Greater Manchester and Cheshire for the amount of new companies registered and even behind Lancashire for the number of total companies registered in a county, the steady growth in the total number of companies registered in Merseyside over the past 5 years should be welcome news for those in the region.

Despite this positive growth, the same figures also revealed a dramatic increase in the number of companies being dissolved in Merseyside from 5,930 in 2014 to 7,694 in 2015. Whilst the reason for this increase is unclear, the most common reasons for companies dissolving include having significant debts or liabilities, poor cash flow or unrest within the company. To avoid these, companies should always be mindful to consider the following:

  1. Implementing a shareholders agreement to govern the relationship between the shareholders and setting out when and how a shareholder can sell their shares in the company, without forcing the company to dissolve;
  2. Reviewing their terms and conditions to ensure that all of their payment terms are identical and in line with its sales and/or order process; and
  3. Having a procedure in place to pursue bad debtors.

Given the potential political and economic uncertainty faced by companies in the wake of Brexit, now is the perfect opportunity for a company to review its operations to ensure that it remains as competitive as possible in these uncertain trading times. Please contact our commercial team on 0151 236 8871 to discuss any queries that you may have or to book a free Business MOT Check for your company. This involves a free consultation with one of our solicitors to discuss and review some of the key aspects of your business, before highlighting any potential risk that you may need to look at further.