Where circumstances force you to exit in a hurry (perhaps because of ill health) it is possible that the time of your exit could coincide with a slump in the general economy, or in your particular industry, thus further adversely affecting your selling price. This adverse effect will apply whatever your exit option except, perhaps, a family succession. favour of your credit
Should you have to sell because of the death of a partner or shareholder (particularly where there is no shareholders’ agreement in place) you might have to act immediately with no time at all to plan. Here you will have to sell the business in whatever way you can and whatever the economic climate.
When there is no pressure on you to dispose of your business you can adjust your target exit date. To coincide with favourable economic conditions. If the directors of a company believe a company is insolvent they have an obligation to either re-capitalise the company.
Or to enter into a voluntary arrangement with creditors, or to cease to incur further credit (which effectively means ceasing to trade), or to wind it up. All these outcomes, other than the re-capitalisation will, obviously, have a dramatic impact on any plan to exit the business through conventional methods.
As insolvency is a complex subject, I will spend a moment to explain some of its potential consequences. Where a sole trader decides that his business is insolvent, there is no legal obligation on him to cease trading. Although one would expect that, for his own economic well-being and peace of mind. He would take every step possible to reduce his deficit through returning to profitability, or to cease trading.
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