How To Survive Liquidation

How To Survive Liquidation

How To Survive Liquidation
The present downturn in​ the​ economy has made big and​ small businesses experience financial difficulties .​
Insurmountable difficulties that are mainly due to​ enormous debts have caused many businesses to​ close shop .​
Understanding the​ causes of​ business failures can save the​ company from possible liquidation .​
Business liquidation is​ often referred to​ as​ winding up or​ dissolution .​
It is​ the​ sad end of​ a​ company.
For a​ small business, liquidation is​ as​ simple as​ closing the​ business or​ store, selling the​ stocks or​ the​ assets, paying outstanding debts then go home with whatever cash is​ left after the​ bills are paid .​
However, closing or​ winding up a​ company is​ a​ more complex process- one that will take months to​ finish .​
a​ company’s liquidation sales can last for​ several months.
Liquidation is​ one of​ the​ choices that a​ company experiencing financial troubles may take .​
The idea of​ company liquidation is​ to​ convert the​ assets into cash and​ then use the​ cash to​ pay the​ bills or​ to​ use the​ cash to​ pay the​ creditors or​ to​ take home the​ cash after a​ failed business venture.
The liquidation process is​ begu​n by ceasing all operations, that is​ trading, manufacturing and​ all business deals will be stopped .​
The justification for​ this is​ to​ prevent the​ company from incurring additional debts .​
Mainly, there are three types of​ liquidation.
First is​ the​ members ‘voluntary liquidation where the​ value of​ the​ assets of​ the​ company far outweigh the​ debts .​
This would mean that the​ company is​ solvent.
The second type is​ the​ creditors’ voluntary liquidation .​
This kind of​ liquidation is​ pretty much the​ same as​ the​ members’ voluntary liquidation .​
The only difference is​ that the​ value of​ the​ assets is​ not enough to​ pay the​ debts-meaning the​ company is​ insolvent.
The last kind of​ liquidation is​ the​ compulsory liquidation .​
This is​ a​ court ordered liquidation where a​ receiver is​ assigned by the​ court to​ evaluate the​ assets of​ the​ company and​ afterwards see to​ the​ liquidation of​ the​ assets.
Before finally deciding on liquidation, the​ business owner should seek the​ help of​ professional debt adviser who can offer solutions and​ advice to​ halt the​ impending closure of​ the​ company .​
It is​ a​ wise move that should be taken by the​ business owners and/or business directors because these debt advisers are experts in​ the​ field of​ debt management and​ they will provide very useful solutions to​ help the​ business owner solve the​ financial problem.
These debt advisers will provide you with ways how to​ circumvent the​ liquidation option or​ if​ liquidation is​ finally decided, will provide services that will hasten the​ process with the​ least damage to​ the​ clients’ interest and​ in​ most cases will produce positive results.
In most cases, these debt counselors will offer the​ client more options .​
They will explain to​ the​ clients that insolvency and​ liquidation are not the​ only outcome of​ business failures.
Although company winding up would mean the​ end of​ a​ company, it​ is​ not the​ end of​ the​ business owner’s financial life .​
It is​ a​ known fact that many businessmen are able to​ rise from the​ after effects of​ liquidation and​ is​ able to​ succeed by using the​ lessons learned during the​ process of​ liquidation.

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