SmallBusinessNewz

It's a fact of life that businesses sometimes fail, and if one happens to fail while it still owes another company money, there's often not a lot to be done.  But a class of firms known as "phoenix companies" has been using some business-related death and rebirth cycles to abuse small businesses.

Imagine that after a place called Grimm, Mason, and Smith went out of business, a place called Smith, Mason, and Grimm popped up, free and clear.  Although phoenix companies may not be quite so obvious, the Forum of Private Business defined them in a way that makes things look similarly shady.

"A phoenix company exists where the assets of one limited company facing liquidation are moved to another business," according to a statement.  "Often, some or all of the directors remain and the new business frequently operates in the same area as its predecessor."

And Mike Hancock, the MP for Portsmouth South, told the FPB, "The Better Payment Practice Campaign found that a quarter of companies have fallen foul of 'phoenix companies.'  Obviously, smaller businesses in particular need to get all the money that is owed to them and even one default can make the difference between an otherwise well-run company going bust or continuing in business."

So this is another thing to watch out for, and if you're the vocal type, to bug lawmakers about.