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Close Down The Business

Closing a business is usually not an easy decision. However, it can be the best solution.

After a period of hardship, you might have come to the conclusion that there is no future for your business and that it is only a matter of time before others make the decision for you.

Be in charge

It would usually be in your own interest to make such a decision by yourself.
If you intervene at an early stage you may even be able to sell the company, thus limiting the loss.

Red light signals

If you as the owner see these things happening in your company, you are in the danger zone:

  • Your overdraft facility grows
  • More and more people are not being paid
  • Banks and others demands security to work with you
  • Debt to taxation authorities and other public institutions
  • Your turnover goes down
  • No or negative profit
  • Negative equity capital
  • You cannot overview the situation
  • You are much stressed
  • You are stubborn and often aggressive

Wind-up assistance

In such a situation it is a good idea to consult an adviser - e.g. a lawyer or an accountant.
Even if you are met with a payment on account requirement before the accountant or lawyer is willing to spend time on the matter, it could be money well spent as s/he will help you get the best out of it.

Funds to pay all

There are many things you need to get under control. E.g. you have to estimate whether you have enough funds to pay all your creditors or if you have to face the fact that not all get their due share.
In the latter it is important that a lawyer assists you during the winding-up as you will otherwise inadvertently risk committing an offence.

Voluntary winding-up

Fortunately, not all wind-ups take place because the business owner is directly or indirectly forced to do so.
You may have gotten a very prosperous job offer or there may be other positive incentives for you to discontinue your business.

In this case things are much easier as you yourself set the pace. Alone or in consultation with an adviser you can create the framework of the winding-up.

Maybe you would like to continue your company on a low activity level with a view to take it up again at a later stage.
Go to next business issue: Financial Control

The point to remember about selling things is that, as well as creating atmosphere and excitement around your products, you´ve got to know what you´re selling.
- Stuart Wilde, motivational speaker

Closing a Business
Financial Control - Danger Signals
Financial Assessment
Bank Indebtedness
What is Accountancy?
Principles in Accounting
Understand Financial Info
Safeguarding Your Assets
Help to Take Action
Close your Business