Entri AdminEntrihub chats to Robyn Hey, Founder of Robyn Hey Attorneys. Robyn talks about closing a business for struggling businesses.
Question 1: How do you end a business?
Robyn: Where you are operating your business out of a company or a cc and you want to stop trading. The most appropriate way to do that is through liquidation or through deregistration of your business. It's true that some people just shut up shop and go but the difficulty with that is that for many years you've got these debts hanging over you and you don't have any certainty. Often I advise clients to liquidate their businesses even if there aren't massive debts or massive assets because it brings finality and certainty to the situation. What you don't want is two years down the line when you've started training again to suddenly start getting summonses relating to assets or sureties that you've signed. You just don't want that kind of nonsense in your life when you're moving forward.
Question 2: How soon can you start a new business?
Robyn: People often ask me whether they can start a new business immediately after they liquidate their first business and the answer is yes, provided that you deal with your liquidation ethically. You also need to understand that if you have liquidated the business technically that business, if there no assets or insufficient assets to pay creditors and full those creditors don't get paid in full. If you want to trade in that industry you're going to need to have creditors that understand that this future value to be had in trading with you. Often you have to deal with your creditors in full in any event if you want to continue trading because they won't supply to you. When somebody comes to me and asks me about a liquidation we always sit down and we have a look at a holistic plan for them. We look at where their liability sits. Whether they have to liquidate and often people are desperate or they don't know what to do. We advise them on the most ethical and lawful way to deal with their crisis, whether that's through a liquidation or a business risky or a turnaround scenario.