There use to be a myth that you could sell all your assets for a £1 and that would stop them being sold at auction. Unfortunately, it is just that – a myth. If you are going to sell assets before you liquidate your company, make sure you are not underselling them.
One of the first jobs we do when instructed is to get any assets valued, this makes sure the Directors are not leaving themselves open to a legal headache further down the road.
If you are in a position where you can’t engage a liquidator’s services prior to Liquidation, then get a valuer in. They will tell you exactly how much your assets are worth.
Ownership of assets
Before selling any of your company’s assets please make sure you that you technically own them. During a company’s Liquidation we are seeing more and more problems over people selling assets they never actually owned.
If you have taken out finance to purchase assets, you may want to check the details on your finance agreements as you may find that the finance is actually secured against the assets. Until the finance is paid, you don’t own the assets.
The second thing to watch for is ‘retention of title’. This basically means that when a supplier sells you an item, they retain the legal right of ownership until such a time as you have paid for the items.
In summary:
- Only sell assets that you own.
- Get any assets valued prior to selling them.
- Keep all sales documents.
- If in doubt, talk to your liquidator!