Manage your business
Close or sell your business
Create a detailed plan for transferring ownership when you sell or close it. Seek advice on any final decision you must make.
- Close your business
- Sell your business
- Transfer ownership
- File for bankruptcy (suspension of payments)
Close your business
Closing a business is a difficult decision to make. You should seek legal advice as well as advice from other professionals, such as accountants and business consultants, when making these decisions.
Follow these steps when closing a business:
- Decide to close (discontinue operations). A sole proprietorship can decide to discontinue operations on its own, but all other types of partnerships require the co-partners to agree.
- File dissolution documents. You must continue to pay taxes if you do not legally dissolve your business.
- Cancel all of your registrations, permits and licenses, as well as your business name. Protect your finances and reputation by canceling any of these that you will no longer use, such as your business name.
- Adhere to the labor laws and regulations.
- Take care of financial obligations, such as paying all taxes (BBO/BAZV, AWW/AOV, wage tax, income tax, profit tax, etc.).
- Retain your records and important documents, such as tax and employee information, for at least ten years.
Sell your business
You may decide to sell your company after careful consideration. A good plan can assist you in ensuring that you cover all of the essentials.
Before you start negotiating with potential buyers, decide on the value of your company. Consult a professional for this purpose (appraiser).
Determine the value of and the properties and real estate owned by your business. These could include your brand, intellectual property, client information and projected future earnings.
Consider the following common value methods when determining the worth of your company:
- Focus on your revenues. Assess the projected earnings and take into account any potential risks.
- Concentrate on the market. Compare your company to other similar businesses that have already been sold.
- Emphasize the assets. Subtract the total value of all your assets from the total value of your commercial obligations (liabilities).
Prepare a sales agreement
To sell your business legally, prepare a sales agreement. This document enables you to sell your assets, such as company shares. It is advisable to have a lawyer assess whether the sales agreement is accurate and complete.
Make a list of everything you sell, including the names of the salesperson, buyer and company. Include background information. Determine how the business will be run before it is closed, as well as the information to be provided to the buyer. All adjustments, the broker’s rate and other relevant details should be laid down in a written agreement.
Make sure you do not forget any assets or liabilities, as this can cause problems even after the sale is completed.
A lot of small business owners will have to transfer ownership to another person or entity at some point. This can be accomplished in a variety of ways.
|Immediate sale||Sara owns a failing shoe store and decides to sell it to raise funds.||Sara has transferred ownership of the store and has received her money immediately by selling it.|
|Gradual sale||Johnny runs a market, but he has decided to stop selling there. Johnny is satisfied because he found renters to provide him with a source of income.||This option is advantageous for someone who is unable to easily sell his business but can finance a long-term debt. A gradual sale is a versatile option for transferring a business.|
|Lease||Johnny owns a car rental company and has decided to study in the Netherlands for two years. He has decided to rent out (lease) his property to his cousin for two years and to transfer ownership to him.||By transferring ownership via a rental (lease) system, he will be able to write down all of his conditions in a contract and receive payment during his absence.|
File for bankruptcy (suspension of payments)
Debt collectors are the ones who file for the bankruptcy of a legal entity or natural person, but the same legal entity or natural person can also file for bankruptcy itself/himself. This can happen if a debtor is unable to pay his or her debt collectors.
It is necessary to have a support promotion to be declared bankrupt and have this granted.
This is a payment incentive offered by other debt collectors to a debtor who has been declared bankrupt.
The debtor loses ownership of the assets the moment the judge declares bankruptcy. The judge who declares bankruptcy will appoint a bankruptcy trustee to oversee the case, and who will take the debt collector’s interests into account as much as possible. The bankruptcy trustee then becomes the judge and will be responsible to the judge until the bankruptcy is completed.
A company can also ask for a suspension of payments. This means that you will be able to flatten your payment and get your company out of debt.
For a suspension of payments, the company must be experiencing temporary financial difficulties that can be resolved quickly. During a suspension of payments, an administrator will be appointed who, together with the debtor, will decide on the management of the company. When it comes to making important decisions, the debtor will need the support of the administrator.