Closing your Business
A Responsible Exit
It is important that you plan your business’s exit from the industry far in advance, as you’ll want the time to properly consider all of your exit options well before any decisions are required of you. You’re likely going to want to make sure that you’ll be able to get your money out of your business when it has run its course, and proper planning for the future can help secure that.
The Canada Business Network stresses that a successful exit may take as long as five years to carry out. So what exactly goes into the planning process of an ideal exit? If you have not already documented a planned exit in your business plan, consider answering the following questions:
- When am I planning on leaving?
- What do I want to do with my business in regards to getting it off my hands? Options you can plan for include:
- Closing up shop and liquidating (essentially selling) all of your assets to other buyers
- Selling/passing down your business as a whole to a friendly buyer (a family member, or a trusted employee)
- How will I determine the value of my business and its assets?
- Do I have plan after everything is dealt with? How much money will I need to live comfortably in retirement/between jobs?
Even if you’re not planning on exiting any time soon, a well-planned strategy will help provide a destination for you to steer towards while you’re running your business.
As an entrepreneur about to sell or close your business, it is important that you understand the many obligations you have in regards to making a responsible exit. Small Business BC has an extensive section on their website that outlines all of the legal procedures you need to carry out in closing your business. To travel to Small Business BC’s webpage, click here.
What does it meant to declare bankruptcy? More than just a simple announcement, a bankruptcy declaration can help relieve pressure for unfortunate individuals who are unable to repay their debts. Basically, filing for bankruptcy will involve working with a licensed insolvency trustee (LIT), who will deal with any unpaid money lenders, or creditors, on your behalf. After being formally declared bankrupt, you will no longer make direct payments to your creditors, any lawsuits between you and your creditors will be stopped, and your creditors will no longer take portions of your salary each payday.
Once these immediate issues have been cleared up, your LIT will begin to sell any assets of yours to raise money that will eventually be distributed to your unpaid creditors. You will also be required to make surplus payments if you make over $200 more than what is deemed necessary for a family to maintain a reasonable standard of living.
Your Rights when Dealing with Debt Collectors
Note that, when you are dealing with a debt collector, you have certain rights that they cannot violate. Generally, a debt collector can only contact your friends, employer, relatives, or neighbours to get your telephone number or address. A debt collector can only contact you at the following times:
- Monday through Saturday: 7:00am – 9:00pm
- Sunday: 1:00pm – 5:00pm
Collectors are not allowed to contact you on holidays.
Debt collectors are also not allowed to do the following:
- Suggest to your friends, employer, relatives, or neighbours that they should pay your debts, unless they have co-signed on your loan
- Use threatening, intimidating, or abusive language
- Apply excessive or unreasonable pressure on you to repay the debt
- Misrepresent the situation or give false or misleading information
- Add any collection-related costs to the amount you owe, other than legal fees and fees for non-sufficient funds on payments that you submitted
Filing a Complaint
If you feel that a debt collector isn’t respecting your rights, you should know who to contact to resolve the issue. Contact the Financial Consumer Agency of Canada if you are dealing with a federally regulated financial institution, or a debt collection agency hired by one of these institutions. Alternatively, contact BC’s consumer affairs office if you are dealing with a debt collection agency that bought the right to collect your debt from your creditor.