After a natural disaster or other major disruption to your business, you may feel like you would prefer not to re-open your business at all. Maybe your business was already facing difficulty. Perhaps the prospect of having to rebuild, re-open and adapt to new circumstances feels more than you can handle at the time.
Closing your business may be a legitimate decision to make. However, you should also be aware that if you trade while insolvent, you could risk being fined or facing criminal charges under the Corporations Act. Check with your accountant, lawyer or the LawAccess NSW service for advice.
The Business Connect program is also available to NSW small businesses, where an expert can give you advice and guidance appropriate to where you are at in the life cycle of your business.
Exiting your business
There are a number of ways to exit your business including:
- selling the business;
- passing the business on (e.g. to a family member);
- merging the business with another business; and
- closing down the business and selling off assets.
Read more about closing and selling your business.
For assistance in stepping through the decision-making process make an appointment with a Business Connect advisor
Closing or selling
If you decide to sell, a business broker or business valuation specialist can help you to establish the value of the business and publicise the offer of sale.
Note: Even after a business has stopped trading, it will still be registered with the Australian Securities and Investments Commission (ASIC). Visit ASIC for guidance on how to close a small business in Australia.
Steps for preparing your business for sale, transfer or merger
1. Engage a solicitor and obtain professional tax advice.
2. Make sure your business records are tidy, complete and available for inspection when requested.
3. Define the strengths of your business and ensure these are emphasised in negotiations.
4. Make sure matters such as the transfer of any lease and hire purchase agreements on assets are settled.