It has been a fragmented period recently with the Festive Season and school holidays, so I therefore had the time to do some research into the merits of subsequent actions, based on what your Terms of Trade will allow you to and what not, in order to protect your business. One of the things I have been looking at has been recent liquidations and the consequent results.
The three Companies that I looked at had gone into liquidation recently owing creditors amounts of $1.7M, $1.5M and $2.5M respectively. Secured creditors, as opposed to unsecured creditors, received or looked to be receiving favourable outcomes and were overwhelmingly in the minority. What is the difference between the two groups? Robust Terms of Trade would have been in place, allowing a registration to be undertaken to become a secured creditor, for as little as a $20 government fee.
Robust Terms of Trade should contain clauses that allow businesses to secure their interests.
Do you have these clauses within your current Terms of Trade?
Do you register, thereby making your business a secured creditor?
Do you want to be first in line to receive money during a liquidation process, or be bottom of the pile?
Do you want to stop your product being taken from you, even if not paid for?
For $20, why wouldn’t you?
If you want to find out more, please give me a call.
Lower Hutt, Upper Hutt, Petone and Wairarapa