How to get help closing a business?

GibbsRule_No3.

Are there Government information sites to close a small business? 

A friends nephew has been running a bakery for more than 6 years, at least two years on the building lease rental to go. Unfortunately due to rising costs, trouble with a staff member, not charging what they should, despite being told repeatedly. Probably the worst a utility company, electric (for some reason they say he has four accounts with them) and the company that used to supply his online credit charge machine owing him over £35000 between them (solicitor involved, but weeks have passed and they keep delaying by asking for more and more paperwork and then say they have lost it, time and time again), they admit the money is owed. He is suffering with his mental health now, due to the worry.

We want to help but need to know where to go for information.

If he goes Bankrupt will the outstanding money that he is owed be lost, if he had the money he could possibly layoff the main member of staff who is not charging correct prices and carry on. The member of staff went away for two weeks holiday and then took three weeks sick leave, so five weeks away, during that time the till was over £200 up each week and he did not need to order as much in stock for sandwich fillings. He asked his solicitor if he could sack them due to the difference in money but was told it could be a fluke! 

Brie

The last time I sacked a staff member for theft (long ago and far away) I made sure I had it well documented over a number of days.  Otherwise there could be comeback on it.  But if the staff member hasn't been working there for at least 2 years they can be simply let go.  

GibbsRule_No3.

Brie said:

The last time I sacked a staff member for theft (long ago and far away) I made sure I had it well documented over a number of days.  Otherwise there could be comeback on it.  But if the staff member hasn't been working there for at least 2 years they can be simply let go.  

Unfortunately they have been there longer, not sure if the fact it is a Zero hour contract makes any difference. If he could employ a new person to cover shifts and cut their hours it might help but he needs the outstanding money to do that. We have had suspicions for awhile that it was this person, but were waiting to compare the difference in the till. Two weeks A/L it was obvious but then when they were off for the further 3 weeks sick, it just enhanced that suspicion. Hence the query to his accountant/solicitor. Not sure how he can dismiss them. It does look like winding up the business is the best thing for his own mental welfare now.

elsien

Things are getting very confused already.
You talk about laying the staff member  off, which tends to mean redundancy.
Then you talk about sacking him.
Then you reference a zero hours contract - any rights within that will depend on whether the staff member is a worker or an employee.

Is your relative  a sole trader, a limited company or what?
To get meaningful help your relative needs to be asking these questions himself not via a third-party which always adds a layer of confusion.
Plus a 10 second Google would have found him this.

https://www.gov.uk/get-business-support

also business debtline.
https://www.businessdebtline.org/

I’m sure you are  trying to help, but these situations need clear direct questions and answers otherwise it could all go horribly wrong for him.

GibbsRule_No3.

elsien said:

Things are getting very confused already.
You talk about laying the staff member  off, which tends to mean redundancy.
Then you talk about sacking him.
Then you reference a zero hours contract - any rights within that will depend on whether the staff member is a worker or an employee.

Is your relative  a sole trader, a limited company or what?
To get meaningful help your relative needs to be asking these questions himself not via a third-party which always adds a layer of confusion.
Plus a 10 second Google would have found him this.

https://www.gov.uk/get-business-support

also business debtline.
https://www.businessdebtline.org/

I’m sure you are  trying to help, but these situations need clear direct questions and answers otherwise it could all go horribly wrong for him.

We had read the gov.uk site but it wasn't very useful in telling us how to close a business and what you needed to do. The second link might prove useful though.  Seemed more helpful if you were setting up a business. We are vey worried about his mental health, hence trying to find the correct help point to send him to. The main thing is to get rid of the business, second is to know what happens to the money owing to him, if the business folds before they pay the money, that would at least help the situation. It would be easier to close or sell on, if this money is paid to him. In the long run he really does need to walk away from it. He inherited the staff from the previous owner.

elsien

What he needs do and the financial impact depends on how the business is set up. It makes a huge difference in terms of personal liability. 

Hence the sole trader  versus limited company question. 

mlz1413

If you shut the business down I doubt you will get any money owed.

As said before you must be clear how the member of staff is employed.   If it is a zero hour contract and there is a signed contract that you can find then you can cut shifts to suit and if that means only working when others are present then it shouldn't take long before the staff member moves on.
If there isn't a contract or a signed one cannot be found than the contract and hours are implied.

Im guessing a back to work interview wasn't held? But if they are sick again, make sure you do this. You can ask for a staged return and lots of check-in interviews so ensure everything is on track.

Re the credit card machine,  £35,000 is a lot of takings for a bakery.... maybe you just need to go straight to CCJ rather than solicitors racking up costs.  Depends what has been agreed.

Someone needs to take control,  it sounds like there is a good business if it has with stood so many financial impacts.  But someone needs to take on the daily running so the business survives

itsthelittlethings

The till should be balancing every day. He has certainly got problems if the till is £200 up one week and he’s not sure what’s going on.

Savvy_Sue

Does he have an accountant? I'd expect to involve them at an early stage too.