Liquidating assets definition
A creditors’ voluntary liquidation (CVL) is a process designed to allow an insolvent company to close voluntarily.The decision to liquidate is made by a board resolution, but instigated by the director(s).It can take account of personal relationships of mutual trust and confidence in small parties, particularly, for example, where there is a breach of an understanding that all of the members may participate in the business, Upon hearing the application, the court may either dismiss the petition or make the order for winding-up.The court may dismiss the application if the petitioner unreasonably refrains from an alternative course of action.Always describe it as "liquidating" the business and you will attract a higher quality buyer than when you advertise that you are going out of business.
Liquidation may either be compulsory (sometimes referred to as a creditors' liquidation following bankruptcy, which may result in the court creating a "liquidation trust") or voluntary (sometimes referred to as a shareholders' liquidation, although some voluntary liquidations are controlled by the creditors).
While the process of closing a business is very difficult for many reasons, it is important to make sure you get the best value for your assets, pay your employees, satisfy your creditors, and comply with state and federal laws.
Never advertise it as a going out of business sale.
Closing a business and liquidating assets can be a very complicated procedure subject to many laws and regulations.
You should speak with an attorney or certified public accountant that specializes in business closures.