Maybe you are thinking of selling the company or simply shutting up shop and retiring, but in either case, if you employ people there are some costs you need to factor into your plan.
Closing your business
If you want to close the business, any employee who has worked for you for more than two years would be entitled to statutory redundancy pay. This is based on their wage and length of service.
This, of course, can be a significant cost and might well have a bearing on whether you decide to close or sell the business (if you believe it has a market value).
Other than not replacing staff when they leave there is little you can do to avoid these liabilities.
If you are worried your business cannot meet the redundancy payments required, you could potentially argue the business is insolvent. Our insolvency team can advise you.
Selling your business
If you employ people and wish to sell your business you will need to follow the TUPE regulations. These apply to all businesses operating in the UK, regardless of size or activity.
TUPE basically safeguards the rights of transferring employees and requires you to disclose fully to the purchaser whom they will be employing and what their liabilities will be.
It is a complex and potentially quite costly process with harsh penalties for getting it wrong. You should absolutely take advice and factor the likely costs into your plans, including asking price.
What to do now
You cannot avoid these costs but you can mitigate them if you plan ahead and run your business accordingly.
Every situation is different and generally involves thinking beyond simply the employment issues involved. As part of a broad-based commercial law firm we can certainly give you the advice you need.
If you would like to discuss TUPE or any aspect of buying, selling and running your business, please get in touch.