Closing Down Your Business? Here’s What You Should Know

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Closing Down Your Business

There could be a number of reasons why a business may seek closure. From poor management decisions to recessions and war situations are some of the reasons that may ring the bells for any business.

If you study closely, most of the time, it is the difference between the income and expenses that cause a business to wind up early. When a business is under debt or is unable to pay due bills in time, business owners tend to wrap up and settle the credits.

Having said that, winding up a business is not synonymous with pulling down the shutter, once and for all. It requires a lot of legal paperwork and formal settlements to be carried out in order to avoid any future contingencies.

If you are already, facing a situation where you might consider shutting down your business, here’s what you should know before you make any further moves.

Know Your Options

When winding up your business, depending upon the type of company you operate, you have three options.

Bankruptcy

Declaration of bankruptcy is a process that dictates how your company shall pay its creditors. This involves a clear assessment of your company’s resources and assets and the debts you owe. All of these would be used to clear the dues and any unpaid bills, on the basis of their priorities.

Insolvency

When you declare your business as insolvent, it essentially means that you are unable to pay your debts. Before any legal proceedings take place, you can arrange an informal meeting with your creditors to seek out any alternate mode of repayment. This usually involves liquidating the company’s assets to recover the debts and dues.

Liquidation

Liquidation is, in particular, the process of selling a company’s assets in order to recover the debts. The process is followed after you declare your company as bankrupt or insolvent. Liquidation may or may not be sought, depending upon the type of company you have and the amount your business owes to creditors.

Regardless of how you wish to proceed with your business closure, having consulted with professionals who can assist you in the matter can be very helpful. Reputable attorneys, such as https://www.antonybatty.com/company-liquidation suggest that the right attorney can help you seek various options and sort out the best one. But, the real question is how do you choose the right attorney for your case?

Get in touch with a professional attorney

Hiring a professional attorney who can help you get out of this difficult situation is easier said than done. Here’s some help that you can use to find the right assistance.

Make sure you can trust them

Business dealings involve many credentials and company secrets. Securing this confidential data should be your priority. That is why you need to make sure that the attorney you hire is trustworthy. And to ensure the same, you can ask for references from your friends and professional contacts. Additionally, you can visit online forums to know more about the reputation of your potential attorney.

Clear communication is the key

When it comes to hiring the right one, having clear communication should be the foundation of your relationship. Make sure you explain your situation clearly and also understand the solution they offer. This would allow you to avoid any future conflicts.

Hire only a licensed practitioner

Often unaware individuals commit a mistake of hiring unlicensed practitioners in order to save a few dollars. This should be avoided. In fact, hiring an attorney who isn’t authorized to handle any such case, could end you up worse than before. Furthermore, you may even risk forfeiting your rights, unknowingly.

How many years of expertise do they hold?

This is often considered as a litmus test for identifying the right attorney for your case. Law practices are amendable with the amendments made in norms and legislation. A well-versed lawyer would stay up to date with these changes and incorporate them into their practice. This is, in fact, reflected by their experience. The more experience a lawyer holds, the better are the chances that they can save your business. And, having known how many cases your potential attorney has succeeded in, can further affirm their expertise in the field.

Winding up a company is no easy task. It involves a lot many legal formalities and compliance to be followed in order to stay secure out of future conflicts. And to ensure that it is done the right way, it is best to rest your worries with a professional.

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