Sometimes business owners must make a decision: should they sell the business or shut it down entirely? Whether you’re making this tough choice because of economic hardship or because you’ve decided to focus your energy on bigger and better things, if you choose to close your business, this blog post will offer some pointers for liquidating your assets and tying up your loose ends.
Liquidating your assets will allow you to “trade in” your business for some cash. This money can be used to pay your creditors and you might even have some left over to put into your next business venture or your retirement fund! When liquidating your business assets, you must make sure to comply with laws and regulations, and to strategize in a way that will allow you to maximize profits.
What can you liquidate?
Your first step is to take inventory of all of your business’s assets. Make sure you don’t overlook the following:
- Selling office furniture, art, and decorations
- Selling computer equipment
- Sell your inventory (items you sell if your business is a store)
- Request return of security deposit on rental property
- Request refund of any prepaid insurance premiums
Contracts
All of your contracts need to be appropriately terminated. Alternatively, you may be able to assign them to a third party. Make sure you follow notice procedures for contracts that are terminable upon notice. You may have to pay a fee on contracts with terms.
Your Lease
If you rent property for your business, make sure you understand your lease terms. It is likely you will need to determine whether it is wiser to find a subletter for the remaining duration of your lease, or to cut your losses and terminate early.
Who to Sell Your Assets To
Employees may be interested in buying furniture for their home offices. Or perhaps you can sell basic equipment over the internet. However for high-value and industry related things that you want to sell, it is important to make sure you seek out the right buyer.
Paying Debts
Any profits from liquidating assets should first go towards paying debts. Remember that you cannot sell something that has a lien on it without first paying it off. However, you may be able to come up with an arrangement in which a buyer first pays the lien, then takes possession of the item for a lower cost.
We can help!
If you need help with the legal side of closing your business’s doors, the Pence Law Firm team is here to help. Contact us if you have any questions!
