How to liquidating assets

An exit strategy is how you plan on selling your investment in your business.Other exit strategies you might consider before liquidation are mergers, acquisitions, and Initial Public Offerings.The reasons for this are numerous: Your heirs may want nothing to do with a takeover or succession plan.They have been too close to the business for years and know the 24/7/365 routine required to be successful in many small businesses.Special needs trusts ease parent worries "Yet a judge could say you're even," Black noted.Liquidating assets should be a last resort in most cases, because liquidation creates a taxable event.A business could liquidate most or all of its inventory as part of a move to a new location, thereby saving money on having to transport all of it to a new storefront.

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In the accounting world, liquidation refers to the process of selling all of a company’s assets to generate cash to pay off creditors, or anyone the company owes money to. Other business assets that could be liquidated include: Liquidation sales often occur as part of a bankruptcy filing, but not necessarily.

There might be a few reasons you decide to liquidate your business.

If you have too many debts to pay and not enough money, you might need to liquidate your business.

"A rose is a rose is a rose, but not when it comes to assets," said Claudia Mott, owner of Epona Financial Solutions, referring to the treatment of assets as a result of divorce.

"Every family's financial picture is comprised of a variety of assets, each of which may need to be valued differently if a liquidation is necessary," said Mott, who is also a certified financial planner and a divorce specialist.

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