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How Do You Liquidate Your Business?

April 29, 2020

In the event that you decide to close your business down, you will need to effectively liquidate your business’s assets. The business liquidation process involves turning your business assets into money to pay off your creditors - or if you’re lucky put in your wallet. But what steps do you need to take to properly liquidate your business? 


It can often be overwhelming and stressful to think about what the process entails, and how to best proceed. It is for this reason that we’ve put together a basic guide on how to liquidate your business.


Step 1: Seek Reputable Liquidators 

Business liquidation can be financially, physically, and mentally draining. Having to deal with the loss of your business can often be devastating. We advise that you opt for unbiased services that can assist in ensuring you make decisions that adhere to legal requirements, and save you the most in the long run. Seeking reputable liquidators with years of experience in liquidating businesses within your industry will ensure the best possible outcomes. 


Step 2: Itemize Your Business Assets

Now that you have a reputable liquidator on your side, they will be able to guide you through every step of the process. One of the first things they will need you to do is to assess your business assets. Business assets are the physical items and properties your business owns, and also includes any monies owed to the business (i.e. rent, security deposits, accounts receivable etc.). 


Step 3: Seek Buyers for Your Assets

Once you have compiled your assets into a list, the liquidator should be able to price your assets based on industry knowledge and market value. Your business liquidation advisor might suggest for you to sell your assets through an auction forum, where competition may drive buyers to spend more to outbid other prospective buyers. The auction process can be quite exciting, and emotions may run high - but it is essential that you trust your auctioneer’s judgement when it comes to the sale of your assets. 


After you’ve sold off your assets, you should be able to pay off your creditors. You have a legal responsibility to your creditors to ensure at minimum fair market value is paid for your assets. 


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