Body Shop is a brand with a long history, especially in Hong Kong, so it has attracted a lot of attention. Corporate bankruptcy can sometimes be saved, but is personal bankruptcy worse?
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The Body Shop has changed hands many times and is still in trouble
The Body Shop is a well-known international brand, but it has fallen into operating difficulties in recent years. It was acquired by the French cosmetics giant L’Oréal in 2006 for 652 million pounds. After that, its performance languished and it was sold to Brazil’s Natura. In November last year, it was acquired by the French cosmetics giant L’Oréal. Sold to German private equity firm Aurelius for £207 million.
Soon Aurelius discovered that The Body Shop’s business was still bleak during the Christmas and New Year peak seasons, so within three months he concluded that it was impossible to revive the business, so he entrusted FRP Consulting Company as the administrator to handle The Body Shop’s bankruptcy proceedings in the UK. The Body Shop has nearly 200 stores in the UK, plus logistics centers and headquarters, involving more than 2,200 jobs. In addition, Aurelius closed The Body Shop’s direct sales business The Body Shop at Home in January this year, and sold the brand’s business in most of continental Europe and parts of Asia. Business operations in Hong Kong have not been affected for the time being.
Seeing that The Body Shop business has had problems for many years, but it is still operating even when it comes to filing for bankruptcy, I believe some people may have questions – would it be worse for an individual to file for bankruptcy?
Companies can file for bankruptcy protection
When you hear that a company is about to go bankrupt, in fact, you often hear about bankruptcy protection, such as Chapter 11 in the United States. When American companies face poor financial conditions or funding gaps, they give the company a buffer period to reorganize the company, instead of Directly enter the liquidation and dissolution process. During this period, creditors are not allowed to pursue debts. At most, they can only recall the goods during transportation. The original intention of bankruptcy protection is to allow companies to try to save them without necessarily requiring direct liquidation. This is especially helpful for companies with more assets, especially liquid assets. In fact, if the company has a certain scale, has a sustainable business model, or the company has a well-known brand, being acquired is sometimes a way out, and it may not necessarily require direct closure. This is very different from individuals.
As for Hong Kong, companies with debts can try the “Debt Repayment Arrangement Plan” and discuss it with their creditors; if individuals have debt problems, they can try to use the “Voluntary Arrangement” to try to avoid bankruptcy. According to information from the Official Receiver’s Office, the debtor may apply to the court for an interim order. During this period, no one may file or proceed with a bankruptcy petition against the debtor, nor may any other legal action be taken or continued against the debtor. The debtor must make a repayment proposal to the creditors, and this proposal, once approved, is binding on all creditors. The debtor generally needs to find an accountant or lawyer to perform the duties of a nominee and make an initial deposit of $12,150. In other words, personal debts can be negotiated with creditors, but it is relatively difficult because companies have a greater chance of owning assets, especially large companies that can sell factories or machinery, or propose business improvement plans to try to persuade creditors to extend repayment. Most individuals only receive salary, plus sellable assets. It is difficult to have flexibility, and creditors have to worry about the assets being transferred.
Personal bankruptcy or loss of original job
Generally speaking, if it is a limited company and eventually fails to operate, the company can be liquidated on its own initiative or by creditors, and the remaining assets will be sold to repay debts. The impact on the directors may not be great unless they personally guarantee the company’s debts. The impact of personal bankruptcy is greater. During the bankruptcy period, the bankrupt cannot serve as a director of a limited company or may not be able to engage in certain industries, such as lawyers, real estate agents or insurance agents. A bankrupt cannot purchase luxury goods such as cars or travel unless there is good reason to do so. Bank employees must declare this to their employer. In other words, personal bankruptcy may result in the loss of your original job, especially a professional job that may involve money. Therefore, personal bankruptcy is worse than liquidation of a company. Therefore, although the cost of setting up a limited company to do business is much higher, most businessmen will choose to use a limited company to operate.
2024-02-19 05:03:45
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