Liquidating a small business

14 Aug

There are also a number of scams that call themselves "self-liquidating loans" or "self-liquidating assets." Most of these use the vagaries surrounding 'self-liquidating' to give the appearance of less risk or more security than is justified.An unsuspecting and often financially challenged investor base can fall victim to good salesmanship and misrepresentation.A business might use a self-liquidating loan (or assets) to purchase extra inventory in anticipation of the holiday shopping season.The revenue generated from selling that inventory would be used to repay the loan.In this article, we explain the procedures you would need to go through to close a foreign invested enterprise in China, and highlight the many related issues that you will need to address.Company law and the liquidation process The procedures for closing a wholly foreign-owned enterprise (WFOE) – its dissolution and liquidation – are no easier or shorter than the process of setting up such a company, and normally take between 12 to 14 months to complete.

A good starting point for purchasing bargain inventory (at least until the business builds a reputation and contact base as a liquidator) is to establish alliances with trustees that deal in commercial bankruptcies.In many ways, a self-liquidating loan is a synthetic form of a revenue bond with a sinking-fund feature.Whereas revenue bonds are secured by specific revenue sources, as such tolls (for highways) and a sinking fund dedicates money to be set aside for debt settlement.A self-liquidating loan is a form of short- or intermediate-term credit that is repaid with money generated by the assets it is used to purchase.The repayment schedule and maturity of a self-liquidating loan are designed to coincide with the timing of the assets' income generation.