Introduction of Business Liquidation
About Business Liquidation
Operating a business in the South African context requires a dedicated effort, at times causing business owners to be the last to benefit from business returns. Over and above the workplace and business performance stressors, business owners and leaders require a second set of entrepreneurial skills namely to manoeuvre the business between external threats in order to cope with financial responsibilities. The global performance and trends of both finances and a generally negative workforce is causing severe constraints on a business to deliver maximum output. This is impacting upstream (suppliers to the business and downstream (Customers) everybody is experiencing the impact of a rotten economy.
Over and above the stressors mentioned above we are now faced with a new phenomenon – Corona Virus (Covid-19). This caused a forced NATIONAL shut-down and will result in businesses who will never recover from the severe impact it is having.
WHAT NOW? – There are salaries that must be paid, rent, telephone, interest paid on the bank overdraft, etc. – not even to mention SARS.
When the situation arises where the financial responsibilities exceeds the projected income, with no long-term solution expected, the owner/s and/or directors/members of a distressed company need to act with the highest priority. Take care to protect yourself against any sub-standard business deals and further debt which cannot be afforded in the long run. When the business is insolvent it is the end of the road – any deal, hence it be re-financing or buying into the business will impact on you personally in the future.
It is recommended to urgently discuss the situation with your financial advisor (Accountant), and to follow the guidance provided by the professional. When the decision is
reached to liquidate the business, it is important to act fast with the help of professionals.