
<p>Did you know that more than <a href="https://www.thebalancemoney.com/why-do-businesses-go-bankrupt-a-crisis-of-liquidity-3974597">22,000 businesses in the US</a> went bankrupt each year from 2016 to 2020? Most business bankruptcy is due to insufficient assets, capital, or a solid marketing plan.</p>



<p>If you file for Chapter 7 bankruptcy, you&#8217;ll liquidate or sell your assets and close your business. However, liquidating a business is not an easy decision. If you&#8217;re struggling with this decision, learning the pros and cons of liquidation will help you decide if it&#8217;s your best option.</p>



<p>Keep reading this guide to learn everything you need to know about the pros and cons of liquidating your business.</p>



<h2 class="wp-block-heading"><strong>Pros of Liquidating Your Business</strong></h2>



<p>The main advantage of liquidating your business is that you won&#8217;t have any more debts.</p>



<p>When you liquidate your company, all pending debts are written off. These debts include unsecured business liabilities you haven&#8217;t personally guaranteed with collateral, like your home.</p>



<p>Once your company is dissolved, creditors will receive what they&#8217;re owed via selling company assets.</p>



<p>Other pros of liquidating a business include the following:</p>



<ul class="wp-block-list">
<li>Property leases and purchase agreements are usually canceled</li>



<li>There will be an end to legal action from creditors</li>



<li>You&#8217;ll have personal liability protection from things like wrongful trading</li>



<li>Voluntary liquidation helps you avoid lengthy court proceedings</li>



<li>Liquidations don&#8217;t cost much because insolvency practitioners take fees from the sale of assets</li>



<li>You can start another business after the liquidation is complete</li>
</ul>



<h2 class="wp-block-heading"><strong>Cons of Liquidating Your Business</strong></h2>



<p>The main disadvantage to liquidating your business is that all your company assets will be sold to pay creditors. This includes everything from specialized machinery and property to company vehicles.</p>



<p>Since liquidating your company involves the sale of all company assets and dissolving the company entirely, it also includes your employees. As a result of the liquidation, all of your employees, including directors, will become redundant and lose their jobs.</p>



<p>Other disadvantages to liquidation include:</p>



<ul class="wp-block-list">
<li>Creditors and suppliers lose money</li>



<li>It affects your business reputation</li>



<li>You lose trading licenses and valuable assets</li>



<li>You can&#8217;t claim losses on your taxes</li>



<li>Your entire business finance history will be subject to an investigation</li>



<li>You&#8217;ll be restricted from using the same company name or a similar company name in the future</li>
</ul>



<p>You&#8217;ll also have to pay back business debts involving a personal guarantee. A personal guarantee is a legal promise to repay credit given to you for your business.</p>



<p>Creditors with a personal guarantee from you will likely take you to court if you don&#8217;t pay the debt.</p>



<p>Finally, liquidation can be a highly complex process. Certain businesses, like supermarkets, can be especially complicated since there are numerous assets and creditors to contact. You can learn more about <a href="https://www.tagexbrands.com/the-ultimate-guide-to-supermarket-liquidation/">supermarket liquidation</a> here.</p>



<h2 class="wp-block-heading"><strong>Learn More About Liquidating Your Business</strong></h2>



<p>Now that you know more about the pros and cons of liquidating a business, you&#8217;ll better be able to decide on the best option for you.</p>



<p>Take the time to talk to a lawyer and an accountant to ensure you understand your liquidation options thoroughly. It&#8217;s also essential to get <a href="https://backstageviral.com/">professional</a> help with the liquidation process.</p>



<p>Make sure to visit the rest of our blog today to learn more business tips!</p>

The Pros and Cons of Liquidating Your Business
