Deloitte's Philip Reynolds sets out the different options available to a business owner when the writing is on the wall.

Each situation is different, however, and it is always a good idea to get advice from an auditor or lawyer to ensure that you protect yourself. The cost of a liquidator for most SMEs ranges from between R8000 and R25000. But liquidators are professionals who deal with closing businesses on a daily basis - it all comes down to protecting yourself.

Solvent Businesses:

• Members or directors can sell off all the assets, pay all debts and deregister with Cipro voluntarily. In some cases there might be certain tax implications if dividends are paid out.

• Voluntary liquidation is an option if 75% of the shareholders agree. Apply to the master of the high court for an order and a liquidator will be appointed.

Insolvent Businesses:

• Anyone with vested interest - from creditors to directors and employees - can apply for a liquidation order. The court will appoint a liquidator. Voluntary and involuntary liquidations follow the same path once this has been done.

• You can close down the business yourself, even if it is insolvent, by basically taking over the role of liquidator and reaching agreements with creditors.

• If there is a potential buyer, and you have agreements in place with creditors, approach the court to allow the business to continue trading. This is done when the owner wants to exit.

Pitfalls:

• Once a business has been liquidated, it is the end of the road. Closing down a business on your own means that debt-related claims can still be lodged.

• Closing a business on your own is a matter of practicality and you should think beyond assets and creditors. Staff retrenchment, vehicle deregistration, public notices, outstanding VAT payments and ending lease agreements are just some of the other elements to deal with.

• Business owners, thinking of killing off a debt-ridden business and starting afresh using the equipment or assets, are in for a surprise: a liquidator can attach assets up to six months after it has been sold - if the price was well below market price.