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It is difficult to run a successful business – more than 80% of new businesses fail, according to the U.S. Bureau of Labor Statistics. Starting a new company is easy – in many cases you can create a new company in less than a day for just a few hundred dollars. However, people are finding shutting down a company at the end of its life to be a much tougher haul, as it involves closing out (sometimes difficult) relationships with creditors, state and federal regulators, customers, and employees.
A Difficult Problem
Traditional shutdown processes can take months or years, and leave participants financially and emotionally drained. Conventional shutdown options can cost more than $75,000 and can include a combination of a liquidation company, accounting firm, and a law firm and filing for bankruptcy.
A New Approach
A new industry is emerging to solve this problem. Early industry participants include SimpleClosure.com, SunsetHQ.com and CorporateSunsetting.com. Significant industry interest is evident through strong venture funding, including seed rounds in 2024 in the $4MM+ range.
The approaches the new companies are using can be broken down into two main business models:
- Reduction of time & effort through the automation of existing processes (SimpleClosure and SunsetHQ), and
- The use of an immediate acquisition model (Corporate Sunsetting) obviating the need for many of the traditional steps, and enabling the completion of the transaction with the elimination of company liabilities in minutes rather than weeks or months.
All three provide add-on services such as creditor, regulator and employee notification.
Solving the Liability Problem
Importantly, Corporate Sunsetting empowers the owner of the undesired company to dispose of the company’s liabilities with the sale. The other two approaches necessity the payoff of existing liabilities prior to complete closure. Corporate Sunsetting also provides the option to control the communication flow with his/her investors, creditors and the world to help minimize any potential reputational damage.
Corporate Sunsetting is leading the way in revolutionizing company shutdowns.
