Planning for any eventuality in business should be the legal cornerstone of any entity, says Jennifer Blandos and Kellie Whitehead of Female Fusion Network
Jennifer Blandos (left), Managing Partner of Female Fusion Network and Founding Partner Kellie Whitehead
The plight of suppliers in the event of a business going into liquidation is a challenge many in the UAE are currently reeling from.
It’s a time that many SMEs and micro businesses do not plan for when building up relationships, securing agreements and fulfilling the logistics of delivery and sales to the retailer. Much of this ‘back and forth’ occurs between the SMEs themselves, as well as the larger stores or national chains. Whilst entering into these agreements should never be clouded by the possibility of things going wrong, there are calls more recently for further protection for suppliers when things do.
Whilst we would want to see more protection under law, and at a national level, we need to urge SME owners to protect themselves as far as they are able within these planning and contractual processes. Not just in the event of a business ceasing to trade, but within the eventuality of issues arising around payments and withholding of monies and stock also.
Planning for any eventuality in business should be the legal cornerstone of any entity. From solopreneurs upwards, having your legal ducks in a row via contracts reads like a given, but in reality many SME’s and micro businesses simply avoid these steps and only recognise the need, when sadly it becomes too late.
With recent liquidations and closures, members of Female Fusion Network are reporting losses of anything from a couple of thousand dirhams right up into the millions. Whilst many at the lesser end of that have simply absorbed the loss and moved on, for many this is simply not an option and are pursuing either the creditor process via the Liquidators instructions or further legal channels.
But what rights do you have as a supplier when this happens? Even with all contractual paperwork in order? Sadly we are still at the mercy of the liquidating business. If they actively choose not to communicate difficulties with stakeholders and suppliers, the news usually comes too late. Some businesses approach this in an appropriately professional way, in the instance of Sprii for example.
Creditors received full instruction from the appointed liquidators alongside the news that the business had ceased trading – many others are not quite as fair. Even in this instance, it comes as shock and surprise, and whilst such communications help with clarity and ‘next step’ process, it still leaves suppliers with a protracted battle to secure their monies owed and in some circumstances get their stock back.
Anecdotally, we see constant reports of retailers withholding payments and constant delayed payment processes even with all contractual agreements in place. This leaves suppliers both frustrated and resentful, and feeling very much at the mercy of larger companies, with seemingly little recourse.
This behaviour leaves SME and micro businesses feeling powerless against such challenges with any contractual agreements rendered worthless. Suppliers have legal recourse only when they done full due diligence throughout the agreement process and keep appropriate records accordingly.
SME’s and microbusinesses, when supplying others, are beholden to the morals and ethics of the larger business, irrespective of contracts and rights
Having full legal contracts from the start sounds obvious, but for many, they are still left with a feeling of helplessness when things go wrong or they cannot get paid their dues.
We need to see better behaviour from larger companies based upon relationships with suppliers and payments owed. Nobody plans for a cessation in trading or wants to see it – everyone is affected negatively, but we should fully expect to be paid on time and within terms.
Seemingly SME’s and microbusinesses, when supplying others, are beholden to the morals and ethics of the larger business, irrespective of contracts and rights – and this is where we need to see the change the most.
Kellie Whitehead, Founding Partner and Jennifer Blandos, Managing Partner of Female Fusion Network
Female Fusion Network is the most dynamic and engaged association for female entrepreneurs in the UAE. Founded in 2015, as a platform for like-minded women in business, we now boast over 20,000 members across all nationalities, representing a myriad of industries within every sector.
Female Fusion members enjoy the opportunity to network in person via events that cover both learning, sharing and social, from intimate focus groups to 250 women in business in one venue.
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by Staff Writer
More of this topic
Protecting SMEs when a business goes bust
Planning for any eventuality in business should be the legal cornerstone of any entity, says Jennifer Blandos and Kellie Whitehead of Female Fusion Network
Jennifer Blandos (left), Managing Partner of Female Fusion Network and Founding Partner Kellie Whitehead
The plight of suppliers in the event of a business going into liquidation is a challenge many in the UAE are currently reeling from.
It’s a time that many SMEs and micro businesses do not plan for when building up relationships, securing agreements and fulfilling the logistics of delivery and sales to the retailer. Much of this ‘back and forth’ occurs between the SMEs themselves, as well as the larger stores or national chains. Whilst entering into these agreements should never be clouded by the possibility of things going wrong, there are calls more recently for further protection for suppliers when things do.
Whilst we would want to see more protection under law, and at a national level, we need to urge SME owners to protect themselves as far as they are able within these planning and contractual processes. Not just in the event of a business ceasing to trade, but within the eventuality of issues arising around payments and withholding of monies and stock also.
Planning for any eventuality in business should be the legal cornerstone of any entity. From solopreneurs upwards, having your legal ducks in a row via contracts reads like a given, but in reality many SME’s and micro businesses simply avoid these steps and only recognise the need, when sadly it becomes too late.
With recent liquidations and closures, members of Female Fusion Network are reporting losses of anything from a couple of thousand dirhams right up into the millions. Whilst many at the lesser end of that have simply absorbed the loss and moved on, for many this is simply not an option and are pursuing either the creditor process via the Liquidators instructions or further legal channels.
But what rights do you have as a supplier when this happens? Even with all contractual paperwork in order? Sadly we are still at the mercy of the liquidating business. If they actively choose not to communicate difficulties with stakeholders and suppliers, the news usually comes too late. Some businesses approach this in an appropriately professional way, in the instance of Sprii for example.
Creditors received full instruction from the appointed liquidators alongside the news that the business had ceased trading – many others are not quite as fair. Even in this instance, it comes as shock and surprise, and whilst such communications help with clarity and ‘next step’ process, it still leaves suppliers with a protracted battle to secure their monies owed and in some circumstances get their stock back.
Anecdotally, we see constant reports of retailers withholding payments and constant delayed payment processes even with all contractual agreements in place. This leaves suppliers both frustrated and resentful, and feeling very much at the mercy of larger companies, with seemingly little recourse.
This behaviour leaves SME and micro businesses feeling powerless against such challenges with any contractual agreements rendered worthless. Suppliers have legal recourse only when they done full due diligence throughout the agreement process and keep appropriate records accordingly.
Having full legal contracts from the start sounds obvious, but for many, they are still left with a feeling of helplessness when things go wrong or they cannot get paid their dues.
We need to see better behaviour from larger companies based upon relationships with suppliers and payments owed. Nobody plans for a cessation in trading or wants to see it – everyone is affected negatively, but we should fully expect to be paid on time and within terms.
Seemingly SME’s and microbusinesses, when supplying others, are beholden to the morals and ethics of the larger business, irrespective of contracts and rights – and this is where we need to see the change the most.
Kellie Whitehead, Founding Partner and Jennifer Blandos, Managing Partner of Female Fusion Network
Female Fusion Network is the most dynamic and engaged association for female entrepreneurs in the UAE. Founded in 2015, as a platform for like-minded women in business, we now boast over 20,000 members across all nationalities, representing a myriad of industries within every sector.
Female Fusion members enjoy the opportunity to network in person via events that cover both learning, sharing and social, from intimate focus groups to 250 women in business in one venue.
Follow us on
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