Job applications normally ask for details of your previous employment. This allows a prospective employer to get a good idea of the breadth and depth of your work experience. If a former employer went bust, you may be reluctant to mention that job on the application form, but this would be a mistake.
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Don't leave gaps
Employment agency JR Personnel recommends that you should not leave gaps in your employment history. Specialist website Total Jobs backs up this advice, arguing that potential employers will be suspicious about the gap and are unlikely to give you the benefit of the doubt. The fact that a former employer is now out of business should not stop you detailing the job on an application form.
Some job application forms require you to detail why you left a particular position. If this is because you were made redundant when the company ceased trading, you can and should mention this: losing a job in this way will not usually count against you. If your former employer was a small business and you had a key management role, be prepared to answer questions about why the business failed. While you may need to defend your role, do not use it as an opportunity to personally attack your former employer as this could give the impression you do not work well with others.
If you left a past job while the company was still active, there is no need to mention that the company has since ceased trading. If this is an important factor for your prospective new employer, such as your former job being with a close rival firm, the chances are your new employer will know about the closure. It's possible you may be asked at interview what your opinion is about the business closing and whether you saw it coming: in most cases you will be better off saying you aren't willing to speculate without knowing all the facts. This approach will demonstrate professionalism on your part.
Mergers and takeovers
If your former employer is no longer a separate business but has now been taken over or merged with another firm, mention this on the application form. A good way is to list the name of the new firm and then write "formerly known as..." followed by the name of the firm when you worked there. Doing this will avoid any confusion.
The main effect of a former employer going out of business is that it is not so easy for your prospective new employer to check references. If the company that has gone out of business was your most recent employer, you can list a previous employer as your main professional reference. Alternatively you can give the current work contact details of your former line manager or human resources manager, making sure to explain clearly what their role was at the old firm. Before doing this, confirm with her that she is happy to provide a professional reference and that you have her correct current contact details.
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