A small business failure

The Herald reports:

The first liquidator’s report on former Green MP Darleen Tana’s husband Christian Hoff-Nielsen’s bike business shows the company owed Inland Revenue and other creditors more than $400,000 at the time of its liquidation.

E Cycles NZ Limited, trading as Bikes and Beyond, went into liquidation on July 16. Hoff-Nielsen is the director and sole shareholder of the business, according to the Companies Register records.

This is no surprise. It seemed obvious from reports that the business struggled for many years. This in itself should not be held against the owner and directors. Many many small businesses struggle with cashflow and profitability. They have very few reserves and owners sometimes end up paying themselves salaries less than their staff.

However most owners do not underpay their staff and/or keep trading when the business isn’t solvent.