When to consider business exit?
At times business partnerships run their course. Be it retirement, interstate relocation or a divergence of ideologies there can come a time where shareholders of a corporate entity seek a return of their investment in order to transition into a new stage in their career. Sometimes director has lost their passion for the business. They no longer wish to continue and are ready to move on to the next stage of their life.
Why do I need a controlled exit?
At times business exit can be simply undertaken via another shareholder purchasing the exiting party’s shares, however, in some instances this does not bring the finality required. Another option would be to simply close the doors, turn the lights off and walk away. Again - this is not going to achieve the best result for all stakeholders. Having a plan and exiting a business in a controlled and organised manner will be better for all concerned.
The goal here is to maximise the return from the realisation of company assets. Debtor collection in important part of the process. Liquidator usually finds it much harder to collect debts after liquidation than the business owner does prior to the appointment. The liquidator would likely sell any assets of the business through an auction house. Again, sale of assets by the owner to a willing third party is likely to achieve a better return.
There are also a ton of little things than need to be done in order to reduce the stress of a business exit. Things like cancelling the electricity account, cancelling other service providers, like phone and internet carriers, terminating hire agreements, issuing group certificates to staff, and the list goes on.