So, the time has come for you to close your business and move on. This isn’t the end of the road for you, however. You can easily get back into the business world through another company startup or looking into a different business venture. Before you go about looking at the future, you need to look at what you need to do in the present. You cannot just stop working on your limited company. Instead, you must go about closing it, and like anything in the business world, it’s not as simple as it sounds.
The way you close your company dictates how well you will do in the future and what you will get out of the closure. You need to create an exit strategy for yourself, notify employees, collect your accounts receivable, and selling your business assets are all things to consider when looking to close your company. Don’t get stuck in a bad situation.
Here are smart tips for closing a limited company
Create an Exit Strategy
The first thing you need to formulate is how you are going to close your company. If there are other owners in the company, you all must consult together and see if it is in everyone’s best interest to close the company. If you own the company, you must consult with your board of directors. Along with this, you need to look into getting help from outside sources such as:
- Bankers and Accountants
- Tax Professionals
- Tax Revenue Agencies
All of these companies and people will help you and your company along the way towards closure. They will inform you of any important information and catch any mistakes you might make along the way. Looking to bring in help, according to the experts at Approved Recovery, will make the liquidation process that much easier and less frustrating. They will help handle all the work regarding shutting down while you can go about ensuring your business runs smoothly for the last few days. Don’t just go about closing your business without getting the support you need.
Notify Your Employees
This is a tricky one, and you must use your best judgment when deciding to notify your employees. By now, you have determined a shutdown date for the company and after that date, no one will be required to work. If you tell your employees ahead of time, it gives them the opportunity to start looking for other work so they do not end up in a financially problematic situation, however with this information they might quit making the company much harder to run in the closing weeks.
If you do not tell them you are closing until the last minute, it ensures they stay working with you, however, you have severely damaged your connection with them and put them in a bad situation. Make sure to give all your employees their final paychecks and check to ensure that you have paid any outstanding out-of-pocket expenses that they may have incurred. Also make sure that you have collected all your company property from them, whether it be cars, computers, cell phones, or even stationary. When you feel you are ready, notify your employees of the upcoming situation
Collect Accounts Receivable or Sell Them Off
Your company probably has accounts receivables with several other companies owing you money. Once you have dissolved, it becomes impossible to collect that money because you as a company do not exist anymore. Therefore, you must make it a point to collect this money. Do not tell these companies that you are shutting down, however, as they will stall on their payments and try to wait you out. If you feel that you will be unable to collect the money before the company closes, you can sell them off to debt collectors. The main goal here is to collect whatever money you can. Do not be afraid to offer discounts on the collection. Collecting your money owed is a smart tip to ensure financial stability after closing a company
Selling Off Company Assets
Once that is all done, it is time to go about selling off as many company assets as possible. Certain assets are quite easy to turn into cash while others are not. View this the same way you would your accounts receivable. Try to get as much money as possible and when looking to sell off non-liquid assets, offer discounts or whatever possible to get these assets out of your hands. Any extra cash in this situation helps. Start listing all your assets, as that is the smartest thing to do when closing the company.
Closing a company is not the end of the world and sometimes it is mandatory based on the situation you are put into. Regardless, you should always make sure that you are closing your company in a smart way that looks out for you and your employees. Create yourself an exit strategy, notify your workers, and finally collect whatever money you can and sell whatever assets you can. Try to get all of this done as soon as possible. Once the business is closed, you are free to pursue your next job. What will be your next business venture?