Cessations can happen for many different reasons.
They may be voluntary or may be forced upon us. You might have time to plan ahead or it could all happen so quickly that you are tossed about by circumstance and happy just to survive.
It is never too early to plan an exit.
Think of it this way. When you go into a building for the first time, it does no harm to be aware of where to find the facilities and the locations of the fire exits. It is the same when starting a new job, a new position or a new business. Even though you do not expect to need them for a long time, if ever, what are you options for making an exit.
But the time you have, no matter how short, will give you time to do something. It might not be everything you should have done, perhaps years before, but it is all the time you have, so you need to use it wisely.
Let’s explore some of the scenarios.
These include sale and / or retirement.
Hopefully you have been working towards this planned scenario for several years.
Conversion from one legal entity to another is another planned event. You may be incorporating your business or perhaps you want to exit the company in favour of the flexibility of a sole trader.
There will be tax and other implications for many of these, so call us if you would like to start to plan your exit in a tax efficient manner.
This includes various scenarios from ill health and sudden death to business failure due to poor profitability and cash flow issues, brought about by difficult market conditions or technological change.
If you want to understand if you are ready for the unexpected consider this. You have had a long hard but satisfying day. You did not quite mange to get everything done but tomorrow is another day. You can finish off in the morning. You go home and then something happens. Suddenly and without warning you collapse and you are in a coma for six months, unable to communicate with anyone. At the end of six months you recover and quickly try to pick up where you left off.
You return to work:
With the benefit of hindsight, what could you have done to prepare for such a turn of events?
If you have any personal assets that are utilised by the business, make sure that ownership is clear and unchallengeable. If the asset is located at the business address you could lose it on a winding up, for want of clarity of ownership. The ownership of property is not usually a problem but other moveable assets can be more problematic, especially cars.