It is a very simple question that any random person may have thought of. However, when the same question arises for a company, things start getting complicated. If an owner of a company who woes you money has passed away, it can make you go bonkers if not thought of in a proper sensible manner.
In this situation, opting for an agency of business debt collection is perhaps the best decision. However, based on the type of business, the complications of debt collection may vary.
Here are 3 situations that deal with the issue in question:
1. Sole Proprietorship:
If the sole proprietor of a business dies owing you money, the business now belongs to the heir(s) of the owner or else to the estate. Unless the business is not kept going, the heir(s) will liquidate its assets to pay off the debts. If the proceeds are still not enough for the clearing debts, the remaining assets in the estate will have to be used. A commercial collection agency sends organized and prompt invoices on your behalf to them so that they do not have any excuse to not pay you.
2. Corporation or S corporation:
With the death of the owner, a corporation does not cease to exist. In this case the estate becomes the owner of either the business or of the shares of the business. And it is still responsible for clearing the debt it owes you. However, based on what the beneficiaries plan to do with the business, it is advised to hire the best collection agency which will keep a check on their proceedings with the help of invoices, and state-of-the-art methods of billing and delinquency management. Otherwise, there are chances that the business will die soon without you getting back your money.
3. Limited Liability Company
In this case, there should be an operating agreement specifying what steps will be taken upon after the death of the owner. It may either continue or let the state laws determine what steps to take next. Hiring an agency of business debt collection is better here too as they have experts with in-depth knowledge about the state, federal and international conventions pertaining to such issues along with the necessary skills of credit collection.
If you are looking for the best collection agency Houston, TX, Nelson, agencies like Cooper & Ortiz, LLC, offer high-end commercial credit collection services without having to file lawsuits which may cause hurt your relationship with your client debtor.
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