The Disadvantages of Liquidation According to J Finn Industries, LLC

We have mentioned previously that liquidation has several advantages. Some of these include clearing debts, avoiding legal actions against you as the business owner and the failing business together with reducing costs during the entire process. Jay Findling, New Jersey Businessman, President and CEO of J Finn Industries account on Behance discusses some of these advantages in detail.

However, there are also disadvantages that come along with liquidation. Some of these disadvantages can be avoided if you get professional help during the procedures. To get help during the liquidation process, contact J Finn Industries, LLC - Liquidator in Morganville, New Jersey. 

Penalties for Unlawful Trading

On liquidation, it is the duty of the insolvency practitioner that is appointed to ensure that they carry investigations about the directors. After a thorough investigation, a detailed report is issued and then any director found culpable faces severe penalties. Depending on the claims against you, there might be a penalty like 15 years ban from acting.

Being Liable for Company Debts

You can be liable for company debts if during acquisition of debts you offered a personal guarantee. In occasions where a company swiftly liquidates with the intention of avoiding payment of debts, the owners (directors) can be liable for the debts personally. This happens when it is evident that the directors intended to indulge in improper actions.

In addition, the directors will be responsible for any overdrafts. It is in the power of the liquidator to choose whether to compel you in paying or not.

All the Assets Will be Sold

After a liquidation, you will not have anything left to start another business. Asset liquidation is equal to complete selling off every item of the business. The money retrieved during the process is used to pay possibly all debts the company owes its creditors.


Employees Lose Jobs 

This is one of the most unfortunate thing that happens during a liquidation process. There is loss of jobs making all the employees to start from scratch.

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