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, read on please, as you will learn that this is exaclty the wrong thing to do!
If you feel that you need someone to help you to make the right decision to get rid of debt AND stay afloat, make use right now of our Get Out of Debt Free CaLL by clicking on the button below to talk to an Liquidation attorney today. Find out what the right solution is.
The Solution: Liduidate the Company
Liquidation closes a company down which stops 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.
To keep on putting money into a failing business is not a wise financial decision
Paying debt for a struggling company is throwing good money after bad. Rather stop and start over as soon as possible so that your money can work for you. To pay debt that a company cannot afford is to basically just staying in one place, because money does not work that way.
If you borrow money to keep a business going, it should be because the business is growing and you need mor infrastructure, bigger offices or more staff. To borrow money to pay historic debt is literlly like throwing money down an endless tube that goes nowhere. It is virtually impossible to trade out of debt if the company is struggling.
If there is no bright future, just hope, then it is most definitely the time to restructure the business and start over.
Liquidation versus emotional attachment
When the business cannot pay its debt it requires a clinical decision to deal with the problem. Keeping the business going because you have an emotional attachment to it or “feel responsible for the staff” is not good financial reasons to flog a dead horse.
The situation requires a study of the balance sheet and if it is the negative, there is only one answer: get rid of the company as soon as possible and start over.
Let me be your voice of reason: emotions do not pay debts. The same with borrowing money to pay debt: unless there is a spectacular REAL solution on the table, borrowing money to pay debt is not wise.
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 will get your business out of company debt
We can liquidate your company in about one week. Liquidation will immediately allow your cashflow to stay in your pocket as you will not have to pay creditors. With a solid Restructuring Plan that we will assist you with, you can continue to trade while you Liquidate and get rid of SARS and other debt.