Some NDIS providers are choosing to exit the sector by winding down their businesses instead of selling.
Closing a NDIS business involves more than simply stopping services. Business owners must complete the right processes to make sure risks and liabilities don’t follow them after they close their doors.
Here are eight key issues providers should consider.
Participant Transitions
Participant transition planning should begin early, particularly if your clients have special vulnerabilities or complex needs. Transition plans must be designed so that following them supports participant safety and meets your duty of care and other obligations to participants.
NDIS Compliance
Providers must continue to meet all their usual NDIS obligations while preparing to wind down the business, and other obligations as part of their wind down plans.
Employee Entitlements
Business closures often involve redundancies and employee exits. Providers should consider notice requirements, accrued entitlements, superannuation obligations, redundancy pay and any ongoing employment disputes.
Contract Commitments
Providers typically enter into various contracts with other businesses such as leases, software contracts and supply arrangements. Providers must validly terminate the contracts they can by the wind down date and work out what to do with contracts that cannot be terminated under the agreed terms by that date. Legal advice is essential.
Insurance
Claims can arise long after services have been delivered. Providers must not prematurely cancel existing insurance policies and should consider what run-off cover and other new insurances should be taken out before the wind down is completed.
Records and Privacy
Providers have to meet all their record-keeping obligations which will continue after the business closes.
Director Duties and Solvency
Directors must continue to ensure the company remains solvent throughout the wind-down process. Outstanding liabilities should be identified and appropriately managed before funds are distributed.
Deregistration
Deregistration is the last step to complete the wind down but must not occur until all necessary tasks have been completed.
Thinking About Closing Your NDIS Business?
Whether you’re exploring your options or have already decided to cease operations, our award-winning team of NDIS lawyers can help you navigate the legal, regulatory and commercial issues involved in an orderly wind-down. Contact us to discuss your circumstances and find out how we can help.
This blog post does not constitute legal advice and should not be relied upon as such. It is a general commentary on matters that may be of interest to you. Formal legal or other professional advice should be sought before acting or relying on any matter arising from this communication.
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