Companies have assets that lose value over time and may need to be disposed of. An example is old cars that may be a drain on the company because of frequent repairs. An asset disposal letter gives the final placement or relinquishment of wastes, excess or scrap using the proper process and under the proper authority. Disposal may be achieved through abandonment, destruction, internment, incineration, donation or sale. Assets must be disposed of in accordance with the asset disposal policy.
Determine the procedures for disposing of assets in the state in which your company is located; then indicate them in the asset disposal letter. Fill out an asset-disposal request form, which can usually be gotten from the company's purchasing department. If selling the assets is going to be the disposal method, request that interested buyers submit expressions of their interest. State the specific assets to be disposed of and give their current worth.
State the place where those interested in purchasing the assets should go to view them. Indicate the time the viewing will take place and the procedure to be used to carry out the sale. State whether the buyer should make a down payment on the day of the sale and whether there are fees to be charged for taking part in the auction.
Include in the asset disposal letter the tendering options if you'll dispose of the assets using the "tender system." (The difference between "selling" and "tendering" is that selling involves selling the assets at a fixed price, while tendering involves buyers setting the prices they're willing to pay. In the tendering system, the assets are sold to the highest bidder.)
One of the options is for the assets to be sold internally, that is to members -- such as employees or shareholders -- of the company. Indicate if external tendering will take place, meaning that outsiders will be allowed to tender. The asset disposal letter must clearly stipulate these options, and indicate the method -- newspapers or online, for example -- of advertising the tender.
Indicate in the asset disposal letter whether there's a minimum bid price and what will happen if that minimum isn't met. State whether the disposal will be halted or other methods of disposal will be considered.
Indicate in the asset disposal letter whether trade-ins will be allowed. This is where assets are traded in and applied to the purchase of new items. If this is the case, specify that an asset-disposal request form be filed and forwarded to the company department responsible for managing the assets. Some companies, however, contract financial services companies, such as investment banks, to manage their assets. In those cases, the asset-disposal request forms are forwarded to the relevant financial services companies.
Point out whether the assets will be disposed of through donation to needy people or whether they'll be destroyed. Indicate the process to be followed to determine who the assets will be donated to. If the disposal will be through destruction, indicate how this will be done and what relevant laws must be complied with.
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