Coronavirus closes business
In Ukraine, as a result of the introduction of quarantine, thousands of enterprises in the industry, entertainment and service sectors, which provide employment to millions of people, stopped their work. In recent weeks, factories, factories, restaurants, cafes, non-food stores have closed in the country, the work of the hotel and tourism industries has been paralyzed.
It is difficult to assess the full scale of the consequences for Ukrainian enterprises from quarantine measures to counter the spread of COVID-19. In the current conditions, it is not easy to save not only small, but also big businesses. However, if big business, whose interests are lobbied by the authorities even in this difficult period, has a certain margin of safety and can stay on its feet, then small and medium-sized businesses suffer heavy losses from the first days of the restrictions. Thus, it is the representatives of the middle class and employees who are the most affected by the restrictive measures.
Many companies, in carrying out their activities, use rented premises, which are actually idle at the moment, in the conditions of an almost complete freeze of business activity. Unfortunately, not all owners of these premises agree to enter into the position of tenants, and agree to reduce the rent and change the terms of the lease agreement. Credit organizations, as a rule, also refuse to provide credit holidays or installment payments.
Employee Relations
Relationships with employees also become a heavy burden for small and medium-sized businesses. Some companies are forced to cut staff, as well as reduce wages, which leads to the creation of additional conflict situations.
The support of the state, which business really needs, is clearly insufficient in order to keep many enterprises afloat. In some companies, the “margin of safety” is already running out, and they may simply not withstand a long quarantine. Many companies have constantly growing debts to creditors and landlords, increasing tax debt, as well as wage arrears.
Business in dire straits
Thus, the Ukrainian business, which had barely recovered from the severe crisis of 2014-2017 associated with the occupation of Ukrainian territories, the conduct of hostilities, the devaluation of the national currency, again found itself in a difficult situation, with unclear prospects.
Even now, business owners need to make strategically important decisions regarding the future activities of the enterprise. At such a time, many decisions will be made in favor of shutting down and liquidating companies and businesses.
However, such decisions should not be regarded as an unambiguous disaster. Do not forget that any crisis is not only a loss, it is, first of all, a time for realizing opportunities. In addition, any crisis ends sooner or later, and a period of deep recession replaces a period of rapid economic growth. Therefore, a timely decision to liquidate or reorganize a business will allow us to approach the beginning of the period of economic recovery in a “clean slate” state, without the load of problems and debts accumulated earlier.
© Legal agency “AKTIV”, 2020.
