~ Close down your business before you are forced to do so. A piece of counter-intuitive advice for dealing with the economic crisis as a result of the coronavirus pandemic ~
PHILIPSBURG — “So far, have you had any clients you had to help close down their business?” StMaartenNews.com asked Natasha Manuela, owner and managing director of Prudential Small Business Services N.V., in an interview about the impact of the COVID-19 pandemic on businesses on St. Maarten. “No, not as yet,” Manuela said. “And I hope to keep it that way.”
StMaartenNews.com asks accountants and tax consultants such as Natasha Manuela for their top three advice for businesses to survive the economic crisis due to the impact of the coronavirus pandemic.
Business owners urgently need help. Rent, salaries, utilities, and taxes need to be paid. What is a business owner to do if he has no business coming in? Cash-flow in many companies in the tourism sector has virtually dried up. Payroll support or business income support are only short term measures. All indications are that we are in this pandemic situation for the long haul.
One counter-intuitive advice from business consultants and bankruptcy experts is the need to make a timely decision to close down a business and do this the right way properly before a business owner is forced to do so through bankruptcy. Business owners can remain in control and save significant amounts of money by being proactive and taking action early on before things get out of hand.
Local accountant and tax advisor, Natasha Manuela, whose company is doing business as Prudential Tax Services, says she has experience how to help business owners close down based on procedural templates her firm has developed over the years.
“Only thing I don’t encourage them to do is to close the NV at the notary as that is even more expensive than the incorporating process itself. Manuela advised.
If business owners follow the procedures correctly, they can end up with a clean NV for future or alternative use. Most business owners see getting rid of expenditures, cutting costs, getting rid of employees (workforce reduction) and overhead costs as the same as closing down. However, a clean NV wherein all business operations have been properly divested can be worth money in the future, whether it is sold or used for a new business purpose.
According to Manuela, business owners suffering from the negative consequences of the COVID-19 pandemic can get rid of costs, but they have to do a cost reduction analysis first, a service offered by her firm and associated consultants. Prudential Tax Services also specializes in risk analysis and risk management.
Manuela even pointed out that business owners that close down their company operations and decide to keep the NV active can request deactivation of the business license and the registration at the Chamber to avoid incurring the annual fees.
The last advice from Manuela that proved to be of significant value for business owners that want to repurpose their NV is to change the DBA name. That is the name under which the NV is legally doing business as. For example, as previously mentioned above, Prudential Small Business Services NV is doing business as “Prudential Tax Services”.
As a bonus tip, Manuela said in repurposing an NV, a business owner can also choose to register a branch of the company under a separate name. This is incredibly valuable advice if a business owner wants to migrate his business partially or wholly online to continue doing business during the pandemic and the period after moving forward. In the new normal many business owners will have to repurpose their businesses to operate online. Or the more realistic option may very well be to permanently or temporarily close down the business until better times.
