Closing down a business is never pleasant, but there are times when it will become necessary. This type of business dissolution discussed here applies to a business that is solvent, but must close. The circumstances that would bring this about are often due to the retirement, incapacitation or death of one of the business principles, and the business cannot continue without this individual, their skill-set and their knowledge. Essentially the business was dependent on this one individual, and now cannot continue.
Process
You can address closing down a business in two ways, either hire a professional company to come in and do the work for you, or get prepared to do the work yourself.
Here are a few of the things you are going to need to accomplish during the process of closing down the business:
Creditors
Establish what creditors the business has, and ensure you pay these off. Some creditors will accept a return of the inventory they supplied as part-payment. You need to negotiate with these creditors to work out the best solution for them, and for the business.
Value of Assets
Go through your business and place a reasonable value on all the furnishings. Computers, desks, furniture, fixtures and equipment will all be sold and you should have an idea of what they are worth. Your accountant can help in this respect, especially when working out an accurate value for equipment that has depreciated over the years on the company tax returns.
Selling of Assets
You must determine how much time you want to put into selling the business assets. If you have plenty of time it is possible you could get full market price based on their value, but this can take weeks or even months to accomplish. If you are looking to cash out quickly, you will need to make some cuts to your prices, especially in this economy.
Advertise
Especially when you are selling at deep discounts, you want to advertise your assets sale. Put up signs; take out ads in local newspapers and even the Internet for maximum exposure. You want to draw in as many potential customers as possible, particularly when you want the sale to be fast. It might even be wise to request a press release about your upcoming closing-down sale.
Security
Anytime you are faced with business liquidation you have the potential for problems, including disgruntled employees who figure taking a little something home is fair compensation. Be aware of this and take necessary precautions.
Keep the accountant and solicitor in the loop and determine the best time frame to liquidate your assets when closing down the business. With the help of your accountant, complete all necessary company paperwork required to finalise the closing down of the business.
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