Liquidation of a business is a powerful legal tool in the arsenal of any business owner. There is little to fear of it and would particularly apply to business owners who answer yes to the following questions: Are you borrowing more and more money to pour into your failing business to keep it afloat? Do you have to sell assets to generate cash flow? What about staff and rent—are you trying to reduce staff and rent just to keep going? If this sounds familiar, you should read further. If you think that it is better to keep going than to stop and start over, you will learn in this article is exactly the wrong thing to do and that liquidation is the cheaper and faster solution.
Liquidate your company in 5 days and get rid of SARS and other debt.
Business Liquidation
Liquidation closes a company down, stopping harassment from creditors. After liquidation, a liquidator is appointed to wind up the company. The creditors must take part in the winding-up process and stop legal action against the company.
Why Continuing to Fund a Failing Business is a Bad Idea
Paying debt for a struggling company is throwing good money after bad. It is wiser to stop and start over as soon as possible, so your money can work for you. Paying debt that a company cannot afford keeps it in the same place: going nowhere and you running around putting out fires, while the company will eventually grind to a halt when you run out of possibilities to borrow more money. Borrowing money to keep a business going should be because the business is growing and needs more infrastructure, bigger offices, or more staff. Borrowing money to pay debt that is not being resolved, is throwing money down
down an endless tube that goes nowhere. It is nearly impossible to trade out of debt if the company is struggling and cannot catch up.
If there is no bright future, just hope, then it is most definitely time to restructure the business and start over, because hope is not a concrete solution.
Why must a company Liquidate?
I will give you legal reasons as well as wisdom:
- In terms of Section 22 of the Companies Act a company that cannot pay its debt must liquidate as soon as possible. If the directors do not liquidate the company but continues to trade, the directors can be held personally liable for the debt of the company even if they did not sign personal surety. When it comes to SARS debt this is an excellent reason to avoid the debt and rather Liquidate as soon as possible.
- Your company should not increase the risk and damage to creditors. That is why Liquidation exists in the first place: to limit damages to creditors and staff and directors.
- If you worked for an employer and they cannot pay you a salary, would you have continued to work for that employer? Most business owners I speak to do not take money from their businesses because they pay debt first and there is not enough money to pay debt and own a salary.
Liquidation: The Path to Financial Freedom
We can liquidate your company within about one week. Liquidation will allow your cash flow to stay in your pocket, as you will not have to pay creditors. With our solid restructuring plan, you can continue to trade while you liquidate and get rid of SARS and other debt.
