Neon French Fry Apron Wearing Woman is a brand that was developed by Francis and is sold at her store Jillie Willie. Jillie Willie is a small business in the kitchenware industry and has been operating in the market for ten years. As such, this article seeks to enumerate the fundamentals of liquidating an LLC or Corporation, and draw comparisons between structuring the necessary legal documents to achieve the liquidation of the corporation or LLC (hereinafter a liquidation agreement) with the process of curating this “stylish and inviting” business presentation. Francis’s neon oversized printing that was on the display, was not the default font, or color. The layout for this French Fry apron was intentional and certainly was a representation of Francis’s attention to detail. In the world of color theory, we know that the combination of certain colors evokes certain emotions. Pink reminds us of cotton candy (and has similar effects), and yellow, associated with the emotion of joy. Here is what that sounds like in business – a neon pink and yellow French Fry apron brightens the mood and is fun. The happy color combination and the quirky French Fry design calls to mind the innocent joys of childhood. Scholars and color theorists call this association a “halo effect”, because once I see the color pink or yellow, I associate similar experiences in other areas of my life to those colors.
Like the wonderful look and feel of the neon French Fry apron, the very presence of a clear and well articulated liquidation agreement can help instilling a sense of comfort in what may be the uncertain and intimidating process of liquidating a Corporation or LLC. Practically speaking, liquidation is the process by which individuals will choose to wind-up the business and tax affairs of the LLC or Corporation utilizing the provisions set forth in the Corporate Bylaws or Limited Liability Company Agreement.
As business owners of an LLC or Corporation (assuming there are more than 1 owners), members will consider winding up the business for many different reasons. For instance members may choose to downsize the business, or one of the owners may decide they want to leave the business entirely, or perhaps one of the majority members would like to divest shares of the company. For my clients, the majority of them liquidate their LLC or Corporation simply because it has become a liability and they want to go out of business.
Traditionally, Liquidation Agreements between and among members of a Corporation or LLC generally provide for the payment of a set amount to the departing members (i.e. owners) of good will, or potentially the payment of a predetermined portion of the company’s operational income. The point that I want to make is that the liquidation agreement acts as a means to effectuate the business decision to liquidate the LLC or Corporation.
What is illustrated in this article regarding Jillie Willies’ look and feel, is that it is well thought out. The French Fry Apron was designed this way for a reason. That same sound approach should be applied to structuring a liquidation agreement. Some examples of items that may need to be addressed by and between the and among the members or shareholder owner of the LLC or Corp., is whether or not there should be a purchase price payment or possibly even a percentage of the net profits earned that should be paid to compensate the departing member or shareholders. While each business entity is structured differently, each situation is unique, so it is important to analyze the facts and how they apply to your specific business needs.
For more information on the process of liquidation, you can visit Wikipedia.