There are many reasons why people decide to shutter their businesses. For some, it is time to shift markets, move on to new opportunities, or retire. For others, it is a catastrophic loss or change in personal circumstances that makes this decision necessary. No matter the reason, chances are you will want to liquidate any assets you can in order to pay creditors and come away with some amount of money after closing up shop. Below are some important things to know as you contemplate this process.
Types of Assets
Assets that can be liquidated include tangible goods or products that can be used by other entities. Some intangible items that ordinarily would have a value if you were selling your business to someone else, such as your business relationships, cannot be liquidated since the business is now defunct. But other intangible assets that might have value to another party, such as your intellectual property and accounts receivable, can be sold. When preparing to liquidate your company’s assets, the most important first step is to create a complete inventory of your saleable items.
Duty to Creditors
If you make the decision to liquidate some or all of your business’s assets, you have a fiduciary duty to your business’s creditors to get the best offer for these assets that you can reasonably find. In some cases, such as with a corporation, the owners are bound by law to find the best deal for liquidated assets. This duty is one reason why you should keep thorough records of any business assets that you sell.
Pricing & Sales
If you have a fiduciary duty to get the best price possible, finding the best sales platform for your various assets becomes more important than ever. Ground-level Internet marketplaces like eBay and Craigslist can work for some things, but for specialized business equipment, you may want to investigate the public auctions and websites that exist for your particular industry. You may also want to enlist the services of a professional liquidation firm or business broker.
Conclusion
In the end, due diligence requires that you make sure your liquidation plan satisfies all federal and state requirements, in addition to any valid business contracts, partnership agreements, and shareholder obligations. For experienced and caring legal guidance, reach out to Integrated General Counsel today so we can help formulate the optimal liquidation strategy for you.
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