Protecting yourself against the bankruptcy of your retail business

In order to be able to face up to the potential and yet very real risks that your commercial or catering activity involves (epidemics, energy crisis, public works, internal conflicts, poor financial management, etc.), it is a good idea to enjoy the support of a specialist in business law (most often lawyers or legal experts) in order to determine exactly what you need to put in place to protect yourself in case of bankruptcy.

In case of bankruptcy, your assets (the building and its content, key money and/or leasehold rights) may be sold off to pay your debts.

Protect your retail activity

Options worth considering include:

• Setting up two different companies to avoid the building being part of the assets: one company would be the owner of the building, the other of the business, in order to avoid the sale of the building if the actual business activity goes bankrupt.
• Having two separate companies for the assets: one that owns the assets while the other runs the business. If the operating company goes bankrupt, the creditors will not be able to claim against the company owning the assets.
• If there are several points of sale, you could create an operating company (whether or not it owns the business) for each establishment so that the bad results of one do not affect the others.

It is therefore possible and recommendable to think about a legal structure that minimises your risks (preferably in advance). Of course, the mechanism chosen will have to fit in with the actual situation and be implemented in the right way.