Liquidating Your Business

Liquidating a business is an option when selling the company, merging, or passing it to a successor is not viable.

The purpose is to convert business assets into cash, settle debts with creditors, and distribute any remaining funds to shareholders.

Although it signals the end of operations, liquidation should be approached with a structured plan to maximize returns, maintain compliance, and minimize complications.

• Prepare your inventory and identify assets for sale. List all tangible and intangible assets such as equipment, inventory, furniture, and intellectual property to determine what will be sold.
• Secure your merchandise to protect assets from theft, damage, or loss before and during the liquidation process.
• Determine liquidation value with a qualified appraiser. Engage a professional to assess the fair liquidation value of each asset, which may differ from market value.
• Estimate net sale proceeds and calculate expected returns after costs and debts; confirm that liquidation remains the best option.
• Choose the sale method and select the most suitable approach such as a negotiated sale, consignment, online auction, sealed bid, or retail clearance based on asset type and urgency.
• Plan the logistics, arrange storage, transportation, and sale scheduling to ensure a smooth process.
• Hire a professional to conduct the sale. Bring an auctioneer, dealer, broker, or liquidation specialist to manage the sale efficiently and reach the right buyers.
• Use a non‑recourse bill of sale to transfer ownership with terms that place responsibility for the asset's condition and risks on the buyer after the sale.

For additional help on succession planning, visit the Service Corps of Retired Executives (SCORE).