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To continue business or not

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1 To continue business or not on Wed Jan 27, 2016 4:43 pm

rudolph16


Arresto Menor
Hi, ask ko lang po if you think dapat ituloy ang business o hindi. The business is sole prop under the name of our father. We are currently transferring the business to us as sole prop din kasi mas mabilis daw yun kaysa kung gawing partnership o corporation. Nagcompute po kami recently and we found out that for last year, our net income is negative. (Profit from sales less company & personal expense and loan interest payments). Nalilito po kami ngayon kung dapat pa bang ituloy o hindi ang business. Tumingin-tingin po kami sa internet at nalaman na mabusisi din ang pagsasara ng business, may mga kailangan bayaran kung sakali. Ngayon pa lang e malaki na ang bayarin dahil may mga lupa kaming nakapangalan rin sa kanya na nakasanla na inililipat din sa pangalan namin. Idagdag pa ang mga babayaran sa mga supplier at banko, hindi namin alam kung paano babangon. May masusuggest ba kayo kung anong pwedeng gawin? Lutang kasi kaming lahat dahil tatay namin ang halos nagpapatakbo ng lahat.

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2 Re: To continue business or not on Wed Jan 27, 2016 8:49 pm

Lunkan


Reclusion Perpetua
If you want to continue, then you have to change to new owner for instance as you have done.

If you want to quit the business, but some is unsolved after your parent died, then you can do that in the OLD Sole P. Such option has a time limit. (I BELIEVE max 12 months.)

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3 Re: To continue business or not on Tue Mar 01, 2016 5:22 pm

centro


Reclusion Perpetua
Some thoughts:
1. Assess the value of the business as it is. Use balance sheet, income statement and cash control. This should give you an objective idea of the value of the business. (Exclude the mortgaged property which is a different transaction. Include liabilities, taxes etc.). Seeing this, at what value are you willing to buy this business? When will you get your Return on Investment? If not attractive, then it is status quo.
2. If you were to start a similar business, using financial statements, how much capitalization do you need? What is the return on investment?
3. Compare 1 and 2. See which one is favorable. Do you have the skills to run the business?
4. Consider also the option of filing for bankruptcy. There are steps to file with the BIR, City Hall etc. And if the owner dies, there are estate taxes to be paid.
Which one is favorable to you?

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