StudyinAustralia.com » » Small Business bankruptcy http://www.studyinaustralia.com Study, Live and Work in Australia Fri, 18 Nov 2011 05:16:38 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 Small Business bankruptcy http://www.studyinaustralia.com/small-business-bankruptcy/ http://www.studyinaustralia.com/small-business-bankruptcy/#comments Wed, 19 May 2010 05:00:47 +0000 Admin http://www.studyinaustralia.com/?p=350 The consequences of small business failure are usually bankruptcy. The sad part of this is that bankruptcy is usually avoidable and most failures are due to poor management training skills and a lack of understanding of the fundamentals of setting up a small business.

Defining Small Business Failure

The definition of small business failure is when a business:

  • declares bankruptcy because it can no longer meet its financial commitments, or
  • closes down because it is insolvent and cannot trade profitably.

Closing a business for medical and personal reasons is not considered business failure as long as it is not associated with financial problems.

What are the Consequences of Small Business Failure?

Not all small business failures end up in bankruptcy. Many negotiate deals with their creditors, e.g. 80 cents in the dollar. Then the company and, in some cases personal, assets are sold off to cover the company

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