Planning and awareness are crucial. The process, timing of events, and tasks must be tailored to the type and complexity of the business. Each case is unique because reasons for dissolution differ, and problems that exist or develop are unique to the circumstance. The following is a checklist of items to consider as early in the process as possible. Most of these issues have some impact on the process of getting out of business:

Human Resources

• Disputes and employee grievances
• Employee benefit plans: incentive plans, benefits, pensions, deferred salary plans, stock options
• Medical insurance
• Business equipment in employee possession - home offices, business cars, cellular telephones
• Termination notices
• Employment contracts and severance arrangements

Finance and Accounting

• Condition and completeness of records
• Deposits outstanding
• Prepaid accounts: insurance, advertising, utilities
• Valuation of assets: intellectual property, work in progress, software, project files, R&D
• Financial planning: capital gains on asset disposition or sale of business
• Bank and investment account(s)
• Loans from financial institutions or individual investors
• List of creditors
• Liens and security interests
• Accounts payable and commissions owed
• Account receivables
• Outstanding tax claims, audit processes, or IRS action
• Cash flow and expenses related to getting out of business
• Business tax planning
• Tax liabilities: local and state business taxes, payroll, industrial insurance, property, corporate income tax
• Audit status
• Stock option conversions

Legal

• Warranties/Guarantees: product, service, contract
• Contacts and agreements: assignment, completion, non-compete, confidentiality, nondisclosure, franchise
• Contingent legal problems: litigation, disputes, judgments
• Strategic alliance agreements and obligations
• Labor union agreements

Operations

• Inventory: material, products, work in progress
• Physical inventory records
• Asset records and list
• Purchase orders outstanding
• Shipments in transit

Facilities

• Financial obligations
• Security
• Insurance
• Modifications to secure plant and buildings
• Lender lease
• Storage of assets and equipment
• OSHA or EPA filings
• Field offices

Administration

• Condition and completeness of company records: charter documents, minutes, stock records
• Documents of title, mortgages, deeds, security agreements
• Business insurance
• Pensions, deferred compensation plans, benefits
• Professional support. CPA, attorney, PR & advertising, marketing, internet host, publisher
• Registrations, permits, licenses
• Storage location of corporate records
• Continuation of board of directors
• Termination of business licenses and tax account

Owners

• Dissolution of business entity
• Ownership of intellectual property: trademarks, patents, trade secrets
• Applications in progress: intellectual property, licenses
• Confidentiality
• Stockholders or equity investors
• Estate issues
• Key person insurance

Marketing & Public Relations

• Sales representatives agreements
• Proposals in process of preparation
• Proposals submitted
• Professional, trade, and telephone directory listings,
• Public notice of change
• Tradeshow and convention commitments
• Samples, price lists, and marketing materials in the field

Website

• Resources. Look for guidance and information from the following resources:
• Small Business Development Centers – Business Counselors (www.asbdc-us.org)
• SCORE Counselors (www.score.org)
• Business Brokers and Professional Business Consultants
• Public Library, Business Section. Books and publications on the topic of buying and selling businesses
• State Departments of Licensing or Commerce
• Business Owners and managers who have experienced the dissolution process

In conclusion, the process for getting out of business successfully requires the same amount of planning as going into business. While the process should be easier, it is likely to be less enjoyable and more stressful. The best advice for business owners is to think about the future during the early stages of getting into business. Exert managerial influence to ensure that complications and problems which could affect dissolution and net value do not develop into roadblocks. When the time for getting out of business comes, engage the invaluable expertise you will need, and prepare a plan.

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