When a small business (less than 10 employees) closes down, should there be compensation/severance pay?

Answer 1

There is no legal requirement (government law) to do so, unless the company has something specific to this in its corporate bylaws.

By using the word SHOULD, you've included a moral judgment in the question. If the company closed and was in excellent financial health, then maybe morally the owners SHOULD. But, if it was in debt or had no money, then I see no reason to.

Answer 2

Hard question to answer with as little information as your giving. Alot depends on the circumstances that caused them to close down. I mean if its closing after 30 years of very sucessful operation so the owners can go sail around the world is completely different than if the electricity and water got cut off.

Your question is "should there be?". In a perfect world it would be nice, but a business does not owe its employees more than it and the employee mutually agreed upon prior to the work being done. Would it be nice if the owners of a business took care of their employees when the time came to close down, sure it would, however very few businesses just voluntarily close thier doors, its usual due to poor business and at that point there are creditors to be paid that the owners have actual tangible obligations to. Don't associate the lack of compensation/severance with the owners lack of desire to provide that type of pay, but most likely their inablity to provide it.