The COVID crisis has been one of the most damaging world events in recent history. The United Kingdom is still battling its apparent hold on our population. This has also led to many other issues. The world market is crashing, and many local businesses are suffering because of it. Here’s an ideal insight on how to close down your business responsibly.
If you are a business owner, saying that the year was tough is an understatement. Aside from all of the current world events, COVID has gripped the nation. If you have already decided to close it down, you need to do it properly. Otherwise, it can lead to other complications if you wish to continue building businesses here.
1. Assess Your Situation
First, it is crucial to see the bigger picture. If you are the sole owner, then closing it down will depend on your will. However, having directors and shareholders can complicate matters when it comes to closing. You need to have their approval first, depending on the arrangement.
Once a deal has been achieved, it is time for you to look for a solution to your problem. As a lost business, you may have a debt incurred while running it. For you to pay for all of those, you may need to file either insolvency or bankruptcy.
2. Bankruptcy vs. Insolvency
Insolvency is a term that encompasses many ways to deal with debt. Bankruptcy is just one of the terms under its umbrella. As for the latter, this is considered as a last resort reserved for owners who have suffered tremendous losses in a period. With this, you would need assistance directly from the government. With insolvency, it is not always necessary, but it would always be your choice.
3. Approaching Legal Assistance
Meanwhile, it would be best if you also had your lawyer and accountants onboard regarding these decisions. They are the ones who will manage both the legal and financial implications of such moves. Also, they can advise you on your next move and see if you will run into trouble during this process. After all, declaring insolvency and bankruptcy is not just about the money involved, but also a lot of intangible aspects like prestige and reputation.
4. Looking For Licensed Insolvency Agents
Once you have already decided to go for insolvency, then you would also need the assistance of an agent. They are the ones who will give you advice on how to deal with this situation. You would either be dealing with the government, creditors or other parties involved with this situation. Having them around makes it easier for you to understand and do better strategies to cope with the process.
5. Do Not Forget Your Employees
Lastly, it is important to inform your employees regarding your decision. This will not just affect you, but more so with them who are just following your orders. Arranging their final pay, processing their remaining benefits are just a few of your responsibilities as an owner.
You might have already seen aftermaths of bankruptcy and related events before. It can be a PR nightmare, and it can also affect your standing in society. Being humane in treating them is not just an act for legal reasons, but humanity’s sake as well.
For more information about business insolvency, reach out to the Annette & Co. team. We’re also on social media – Facebook, Twitter, Instagram, YouTube, and even Tik Tok – so do give us a follow and subscribe!