Company Liquidation – A Process Overview
For most companies, dealing with liquidation is a new experience and one that may bring confusion and questions. The term “Company Liquidation” is used when a business is placed into liquidation once it is unable to meet its financial obligations and pay off debt. This can be done as a voluntary liquidation or a court ordered, forced liquidation, with a liquidator appointed to oversee the process. To best protect your interests, it is a smart idea to consult with your attorney or tax specialist for professional advice before you begin the process.
Company Liquidation: What Steps Do You Need To Take?
The purpose of a company liquidation is to sell assets to pay off as many creditors as possible, and at the end of the process, the business will be officially closed and no longer exist. The steps that a company must take will depend on what type of liquidation it is and whether the company moved willingly to be placed into liquidation or was forced into it by creditors.
Voluntary liquidation permits for a planned, orderly winding-up or dissolution of the business and assets can be sold with more involvement from the company’s owners and directors. A court-ordered or compulsory liquidation is taken out of the hands of the company’s directors. In both cases, the liquidator’s job is to see that the process is carried out properly and legally. Generally a company will need to take the following steps:
Compile a list of all outstanding creditors
Have all of the company’s assets identified, evaluated, and appraised for liquidation value
Put a stop to any present or future contracts and promises made to other businesses and settle up with company employees
Consider outsourcing the process of selling company assets to a qualified third party asset recovery and disposition expert who has been involved in the exact process many times in the past
Factor in all costs related to the company liquidation process including payments to the liquidator, administrators, and the services of a liquidation company
Rabin is an international company that specializes in creating liquidity for complex manufacturing facilities with idle or marginally productive assets. Rabin’s operations include selling entire plants, multiple plant locations, or surplus individual items by auction or liquidation and much more. Past auctions include recognizable names such as Hostess, Braniff Airlines, Montgomery Ward, and the Railway Express Agency. Please contact us to discover how we can assist with any type of company liquidation.