What to Expect During a Business Liquidation

The decision to liquidate your business may not have been easy, but it can be made easier with the right partners and resources. When a company goes into liquidation, its assets are sold so that the creditors are paid what they are owed. Whether you’re voluntarily closing your company or have been ordered to do so by a court petition, the process is standard with a few variations but the same end result.

Understanding Business Liquidations

Begin by familiarizing yourself with the various kinds of liquidations so that you’re able to plan on how to proceed. The main types of business liquidations are:

1. Solvent liquidation (Members Voluntary Liquidation - MVL): Suitable for companies not in debt and wishing to close the business for any reason.
2. Creditors’ voluntary liquidation (CVL): Opted for when a business is unable to pay back its debts, and the shareholders decide on liquidation to benefit creditors.
3. Compulsory liquidation: Occurs when a creditor attempts to force your company to close to recoup the debts they are owed.

Calculating Assets to Be Liquidated

Identify the assets you’ll need to liquidate, including tangible and intangible property such as equipment, real estate, contracts, customer lists, and intellectual property.

Liquidating Items and Finding Buyers

Find buyers for your assets through industry networks, suppliers, competitors, or platforms like Kijiji or eBay. Consider liquidation auctions for a streamlined process, especially for bulk items, guided by professional liquidation experts.

Tying Up Loose Ends

Ensure compliance with secured assets by obtaining creditor permission, handling leased property appropriately, and seeking refunds for prepaid insurance premiums where applicable.

Seeking Professional Assistance

Consider hiring professionals experienced in business liquidations to ease the process and ensure all transactions are properly recorded for future reference and tax purposes.

For expert guidance on business liquidations, contact Michaels Global Trading at 888-471-5066 or visit us online.

Conclusion

Navigating business liquidation can be complex, but with careful planning and the right partners, you can streamline the process and ensure a successful outcome for all stakeholders involved.

‍