Asset liquidation is simply converting as many business assets as possible into cash, which can pay any remaining liabilities. The simplest way to do this is to sell all of your inventory without buying more, collect all receivables, stop buying equipment and supplies, and give notice of dismissal to employees. Use the money collected from the sale to pay outstanding bills.
Next, set a formal date for the business to officially close. Notify customers, suppliers, your landlord, banker and legal authorities, such as the Tennessee Secretary of State, the Tennessee Department of Revenue, and the Internal Revenue Service. Most of these notifications should be made pursuant to state dissolution and termination laws. |
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Then have a final sale of all non-cash, non-liquid assets. If electricity, water, gas, and trash are separate from the lease, arrange for utility companies to stop service.
On the last day, return the keys to the landlord and cut off utilities. Complete and file tax returns. If the business is a corporation or a LLC, you’ll need to file with state authorities. Also, notify the city's business license department.
Here are some tips for liquidating your assets:
- Consult your lawyer and accountant.
- Scrutinize your inventory, assess each item, and prepare it for the sale.
- Secure your merchandise from disgruntled employees and customers.
- Get a liquidation value appraisal.
- Estimate your net sale proceeds to ensure a sale is worthwhile.
- Select the best type of sale for your merchandise.
- Determine the best time for your sale and the most appropriate location.
- Consider hiring an expert (an auctioneer, a dealer, a broker, etc.) to conduct your sale. Choose someone who can ensure that you get the highest possible dollar return.
- Make certain that each bill of sale states that the item was sold “As is, Where is.”
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