Buying Back your Business After Going into Liquidation

Putting your business in liquidation may seem like the end of the road, but if you believe that you can learn from your mistakes, then there is a way that you could give it another try. A phoenix firm refers to a firm which is re-born in some way, hence the name phoenix. It is where all the assets from one limited company are moved to another legal company, and you are still able to act as director.

Buying Back Your Firm After Liquidation

The firm you once owned and all its assets will be placed in the hands of the Administrators, whose job it is to recover as much money from the business as possible. Part of this will involve trying to sell your company for as much as they can, in order for them to do this, they may break it up into pieces, and sell off different sections, such as a contacts database.

You will not be able to operate under the same name, but you may be able to buy back parts of your business. If there is not much interest shown in parts of your firm, then the administrator will be looking to make as much money as they can, so may sell it to you cheaply. You will then have to register as a New Company, but can effectively carry on trading in a similar manner.

Returning Overstocks and Merchandise

Anything that is left over from your company after liquidation will try to be sold. You may have what is known as closeout merchandise and overstock merchandise, which is what will need to go on sale to pay any costs associated with your liquidation. It may be that you do not sell all the closeout merchandise and overstock merchandise, and there could be chance for you to buy back after the firm closed.

If you work in the retail sector, then you may be able to do a deal and return some of your stock to shops, and do some department store returns. If you have bought in bulk, then they may allow you to carry out some department store returns, which you could always buy back later.

What Be Aware Of

Think carefully before placing your company into liquidation though, as it can come with a lot of problems. By placing your firm into liquidation you are basically making yourself and the company void of any liabilities associated with the company. For example, if you have customers that complain about something further down the line, or you are not adequately insured to cover and complaints that might be made against you regarding financial matters, then you may find yourself in trouble. If you are operating a financial firm, you may find it hard to get permission to operate in the financial markets again, if you have left a string of liabilities behind you.

Also, you might want to think about what went wrong the first-time around, and it may be worth trying your hand at something new. There is little point in buying back a company and any overstocks, for it to fail again. If you are going to change the structure of the company, or have an action plan as to how to make it better, then this might work, but if not, it may not be worth it.You may find it hard to secure funding for your new business as well. If you have already been burned and been unsuccessful at running a firm, then it is unlikely that a bank will want to invest in your new company, and depending on the circumstances, may not even be allowed to.

The administrators that are in charge of looking after you business may also be sceptical about selling you back your business, so this strategy may not always work.