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Everything You Need to Know About Business Asset Liquidation

Since the business world can be so competitive, not all companies will end up being successful. In fact, each year, about 7000 companies declare bankruptcy in Canada.

In the competitive business world, not all ventures succeed, and many companies face financial distress. When a business is unable to pay debts or bills, exploring alternatives becomes crucial. One option is asset liquidation – a process where non-essential business assets are sold to generate working capital. Here's a comprehensive guide to understanding business asset liquidation:

What is Asset Liquidation?

Asset liquidation involves selling an organization's assets to address operational issues. This process is often chosen in scenarios such as acquisitions, unforeseen circumstances, or forced exits. When a company faces financial challenges and cannot sustain its operations, liquidation becomes an effective method to settle debts with creditors.

Types of Assets Companies Can Liquidate:

  1. Valuable Office Equipment: Including computers, printers, and other electronic devices.
  2. Furniture: Office furniture, fixtures, and other non-essential items.
  3. Unused Inventory: Surplus stock or goods that haven't been sold.

Types of Liquidation:

The two primary types of liquidation are voluntary and compulsory:

  1. Voluntary Liquidation: Initiated by an insolvent company unable to pay off debts. The process is conducted voluntarily to shut down operations and settle financial obligations.
  2. Compulsory Liquidation: Involves a business being forced to shut down operations due to creditor requests. This process is involuntary and occurs when creditors demand closure.

Asset Liquidation Process:

The asset liquidation process involves four essential steps:

Determine What to Sell:

Analyze current inventory, production assets, and unused goods or services.

List potential liquidation items to understand what to sell.

Write Descriptions and Assign Values:

Provide detailed descriptions for each item to convey its value.

Assign approximate dollar values to each item based on estimates or professional appraisal.

Find Out Who Your Buyer Is:

Identify potential buyers within or related to your industry.

Reach out to interested parties and gauge their willingness to purchase.

Decide How to Sell Your Assets:

Choose the most suitable method based on your industry and asset types.

Options include blowout sales, auctions, or engaging asset management companies.

Methods for Selling Assets:

  • Blowout Sales: Ideal for retail companies, offering significant price reductions to attract buyers seeking good deals.
  • Auctions: Engaging auction houses or asset management companies for larger items, leveraging their expertise and industry contacts.

Let Us Help You Liquidate Your Assets:

Consider partnering with experienced professionals, like Michaels Global Trading, to streamline the liquidation process. With years of expertise, we assist clients in managing the liquidation process effectively, ensuring optimal returns for their assets. Contact us today at 888-471-5066 to learn more about asset liquidation and how we can assist your business.

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your journey with us.