Preparing your Business for Liquidation

It sucks, but sometimes it happens. You had a great business idea, but it didn’t take off the
ground. To stop losing money, you need to proceed to a voluntary liquidation. But doing so
involves a series of steps which you must know about before you call the liquidation
company. Here’s some help.
First, you should hire a specialist who will help you through the different steps. They will take

care of the paperwork while you concentrate on saving as much as you can from your
business. But remember that now that you’ve chosen to go into voluntary liquidation, you
cannot go back. Once it is done, it is done, so make sure that you weighed all your options
before going that route. Again, the specialist will help you determine whether liquidation is
the best choice for your business at this time.
If you do decide to liquidate, remember that your first responsibility is towards your creditors.
You owe them money, and the reason for liquidation is to reimburse as much as you can. If
you have a limited liability company, then you will have to pay anything out of your personal
pocket; otherwise, be prepared to have this impact your personal life as well.
Have your assets evaluated by a specialist as well. You want a good price, enough to pay
creditors. Doing it yourself might seem suspicious, so do hire someone to help. They will
also help you sell your assets legally and properly. When the money starts coming in, DO
NOT PAY any creditors back yourself. It will look like preferential treatment, and you want to
avoid that at all costs. Also, do not reimburse the bank for any overdraft; it is illegal. Have
the liquidation specialist take care of these steps for you. All creditors should be paid equally
up to the amount of your debt, and the bank should be taken care of separately.
Avoid doing any trading that might incur further debt in the last days before the liquidation. If
you do so, you might be committing fraud. You can trade under strict rules, which basically
means that you can only pursue business if it doesn’t incur further debt. But this can be hard
to do, so discuss with your specialist and your accountant.
I know it’s never fun to go through a liquidation. After it’s done, you should look at the
records and see what went wrong. Did you not sell enough of your product? Did you
purchase too much primary material and couldn’t sell the finished product fast enough? Did
you buy equipment that was too expensive? You should make an inventory of what went
well and what didn’t go so well--maybe you had too many employees for the size of your
business? Pair up with a skilled accountant and business analyst to assess the situation.
Maybe next time, your business will actually work!

It sucks, but sometimes it happens. You had a great business idea, but it didn’t take off theground. To stop losing money, you need to proceed to a voluntary liquidation. But doing soinvolves a series of steps which you must know about before you call the liquidationcompany. Here’s some help.
First, you should hire a specialist who will help you through the different steps. They will takecare of the paperwork while you concentrate on saving as much as you can from yourbusiness. But remember that now that you’ve chosen to go into voluntary liquidation, youcannot go back. Once it is done, it is done, so make sure that you weighed all your optionsbefore going that route. Again, the specialist will help you determine whether liquidation isthe best choice for your business at this time.
If you do decide to liquidate, remember that your first responsibility is towards your creditors.You owe them money, and the reason for liquidation is to reimburse as much as you can. Ifyou have a limited liability company, then you will have to pay anything out of your personalpocket; otherwise, be prepared to have this impact your personal life as well.
Have your assets evaluated by a specialist as well. You want a good price, enough to paycreditors. Doing it yourself might seem suspicious, so do hire someone to help. They willalso help you sell your assets legally and properly. When the money starts coming in, DONOT PAY any creditors back yourself. It will look like preferential treatment, and you want toavoid that at all costs. Also, do not reimburse the bank for any overdraft; it is illegal. Havethe liquidation specialist take care of these steps for you. All creditors should be paid equallyup to the amount of your debt, and the bank should be taken care of separately.
Avoid doing any trading that might incur further debt in the last days before the liquidation. Ifyou do so, you might be committing fraud. You can trade under strict rules, which basicallymeans that you can only pursue business if it doesn’t incur further debt. But this can be hardto do, so discuss with your specialist and your accountant.
I know it’s never fun to go through a liquidation. After it’s done, you should look at therecords and see what went wrong. Did you not sell enough of your product? Did youpurchase too much primary material and couldn’t sell the finished product fast enough? Didyou buy equipment that was too expensive? You should make an inventory of what wentwell and what didn’t go so well--maybe you had too many employees for the size of yourbusiness? Pair up with a skilled accountant and business analyst to assess the situation.Maybe next time, your business will actually work!

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