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.Startup Costs: ,000 - ,000 Part Time: Can be operated part-time. Purchased right and this same inventory can sometimes be bought for as little as five cents on the dollar.
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 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.On a direct-to-consumer retailing basis, the inventory can be sold through a company-owned liquidation store or stores, or monthly inventory liquidation sales can be advertised and held over a few days in short-term rental premises.
However, there is a down side to this business, which is purchasing inventory that is difficult to sell regardless of price.
All of the company’s bank accounts should be closed.
The investor shall have the right to preserve the originals of all accounting records and business documents of the company.
However, there will always be some that do not succeed commercially, or that may have to close because of external circumstances affecting their parent company overseas.
There are of course regulations under Chinese law for how these liquidation processes should properly be carried out to ensure that the company’s final bills are settled, tax is paid, and all the company’s remaining liabilities and statutory responsibilities are correctly discharged.
This is a very common mistake for first timers in this industry.