5 Questions On... Closing A Business4th Aug 2022
The impact of the global pandemic as well as the cost of living crisis has taken its toll on many small businesses - if you are thinking of closing your business - you may want to consider these questions first.
How can a solicitor help you with the selling or closing of a business?
A solicitor will ensure that all liabilities are dealt with and remind you to check for errant assets and other issues. If you are selling they will also try to protect you from future claims and problems. They should also remind you to check for personal guarantees and help with non-disclosure agreements.
Are there different processes for closing different types of business?
Yes different structures are dealt with in different ways. There are also different processes depending on if the business is solvent (can pay their debts) or if the business is insolvent (owes money). A solicitor can steer you through the process depending on the structure of the business and the circumstances.
What responsibility do employers have to employees when closing or selling the business?
These differ when closing or when selling. If closing redundancies are likely. If selling then the Transfer of Undertakings (Protection of Employment) Regulations 2006 need to be followed. If you are unsure you should consult a solicitor as this can be a difficult area of law to navigate.
What are the key things to consider when closing a business?
Make sure you get tax advice and make sure you have removed all assets from the Business. In the case of a limited company any assets in the company pass to the Crown when closed. You can reinstate a company but not without cost.
What top three tips would you give to someone thinking of selling or closing their business?
- Always take accounting/tax and legal advice at an early stage to have all the facts before making a decision
- Don’t rush the decision
- You may be able to sell assets such as domain names, websites, trading names and customer lists.
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For more information, please contact our Commercial Property Team.