What Are Liquidated Assets?
The term “liquidated assets” refers to everything of value that is sold off to pay creditors while a business is liquidating or restructuring. To pay off the company’s debts, the money obtained from the asset sale is often distributed to the creditors. In Australia, this is the most common business proceeding before liquidation. Businesses can sell their assets, which can include investments, vehicles, machinery, raw materials, and real estate.
What types of assets can be liquidated?
The simplest technique to identify assets that can be liquidated is to consider tangible and intangible goods with monetary value. Here is a complete list of frequently liquidated assets:
- Real Estate: This includes unoccupied land as well as housing, commercial, or rural property.
- Motor vehicles: Vehicles for the transportation of goods in factories, on and off the road, and with big loads.
- Equipment: Computers and software, phones, copiers, and other electronic devices such as audio equipment
- Machinery: Hardware, robotics, heavy machinery, appliances, and more.
- Furniture: Furniture such as tables, chairs, cabinets, couches, wall art, lights, and other accessories.
- Inventory: Any products, components, goods, or raw materials involved in the manufacturing process.
- Essentials: Office supplies, kitchen essentials, and stationery.
- Financial Securities: Securities such as stocks, bonds and mutual funds.
All assets are sold and converted to cash during the liquidation process. Even though they are considered liquid, assets like stocks and bonds are often converted into cash in order to distribute funds to shareholders and creditors more efficiently.
How do you liquidate a business asset?
It is not unusual for company assets to be sold off before liquidation. The registered liquidator will endeavour to recoup as much value in the assets as possible, in order to pay off any outstanding debts and provide payments to creditors.
If the directors are selling the assets, it is important that it is sold at a price that reflects market value. This is especially important if they sell it to someone they know, such as friends or family. Where necessary, directors should seek an independent valuation from a third party.
If you are considering liquidating your assets to pay off your company’s debts, it may be time for you to get in touch with an insolvency practitioner.
Here at Australian Company Liquidations, our Registered Liquidator can provide qualified and confidential advice regarding your company’s assets and assess your financial situation. Call our team now on 1800 981 070. Our toll-free line is open, 24/7 including weekends.