How to Liquidate a Business
Liquidating a business is one of the important procedures that any person should do. This is done due to several reasons such as settling to other location or retiring from work.
Whatever the reason of liquidating the business, you should observe some conditions to make the process run smoothly.
Liquidating a business is not an easy task as what many people think. Regardless how small or big your business you should consider some factors in liquidating the business. However, the procedures of liquidation are not the same due to the fact that businesses are not the same. Likewise, there is no possible quick-fix answer that can be used for two different businesses. Nevertheless, you can follow some general guidelines to make the liquidation run smoothly.
General Guidelines
The most important thing to have when liquidating business is to secure audited financial statement. The audited financial statement is very significant as you will show it to the potential buyer. Without it the buyer would not be enthusiastic in buying your business. Make sure that the financial audit is done by a Certified Public Accountant. Keep in mind that the audit can help you make good decision that would be to your advantage. It will help you also in deciding whether to sell, to wait or expand the business.
On the other hand, if you are doing the liquidation because you want to sell your business, you should consider forming good and experienced quality team. Make sure that your team has experience and expertise in making good deals. In like manner, you should also bear in mind that your potential buyer is also armed with quality team composed of accountants, lawyers and specialists that would examine your business. The procedure of liquidation is emotional and stressful that is why ensuring the good credentials of your liquidating team is of utmost importance. This is because the team will help you decide whether to sell the business or take other options. By liquidating the business you can decide to sell just a portion of your business. In addition, the liquidating team should be property oriented so that they can come up with the necessary approach that will be advantageous to your business.
Types of Liquidation
Moreover, before you start liquidating your business you should know and understand the different types of liquidation such as the insolvent and solvent liquidations. When the company is not able to pay the debts completely then the procedure that will be used is the insolvent liquidation. Also, the shareholder may also opt to engage in voluntary liquidation. On the contrary, in case of compulsory liquidation the company needs to obtain court order. Nevertheless, liquidating a business has several consequences to face. Obviously, the business owner does not have the power to set out the properties unless the court permits.
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