Sande has been jobless for the last three years and he believed that at this rate, he would probably never get another job until Munaku Traders Co. Ltd called him for an interview. It turns out he was the best person for the job and was given the position of ‘Sales Associate’. On getting home, his housemate told him that he remembered that Munaku Traders had financial issues and had possibly been ‘bankrupted’. Sande does not want to lose his new job but wants to know if a company that is ‘bankrupt’ is allowed to hire.
WHEN IS A COMPANY BANKRUPT?
When we say a company is Bankrupt, we mean when that company cannot continue to run its business because of its debts.
When a person (an individual) is bankrupt, they can continue ‘living’. Unfortunately, when a company is declared bankrupt, it means that the company’s life must come to an end. This is called liquidation (the process of putting an end to a company’s operations and work).
CAN YOU WORK FOR SUCH A BANKRUPT COMPANY?
By law, when a company chooses to close because of its debts or expenses, it stops carrying on its business except where that business is necessary for its closure, such as collecting its money from those who had it or selling off its business goods.
This means that this company cannot employ people to do tasks for the usual business but may employ someone to help with the work leading to its closure, such as selling off its goods or assets. However, it may not be a good idea to enter a long-term employment contract with them since they not only lack the funds to pay you, but any claim you may have against them may not end successfully for unpaid wages since you knew this company was bankrupt.
📷:Unsplash
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