Members Voluntary Liquidation is a solvent liquidation process used to conclude a Company’s affairs, often being the most tax efficient process available to a Company’s shareholders and often referred to as a MVL.
A liquidation process isn’t something that the majority of directors and shareholders would consider in concluding their Company’s affairs, but with careful planning, significant tax savings can be made when placing a Company into Members Voluntary Liquidation.
In most cases, an MVL process will provide a more tax efficient conclusion to the Company’s affairs rather than distributing surplus funds available and striking the Company off from the Registrar.
How Much Does MVL Cost?
Any professional fees incurred in undertaking a Members Voluntary Liquidation are always, with CFS Restructuring LLP, agreed in advance and in writing and are, surprisingly, always significantly less than directors or shareholders would anticipate. Directors and shareholders are often hesitant about instructing professional firms for fear of the costs that may be incurred, but with proper planning with the Company’s current advisors, and through our expertise, these can be kept to a minimum. Here at CFS restructuring LLP we will clearly demonstrate to all stakeholders the savings that can be made when entering a Members’ Voluntary Liquidation process, including the agreed professional fees that are likely to be incurred.
Is a MVL the Correct Solution for Your Company?
In proposing an MVL, the directors will have formed the opinion that the Company is solvent, has assets in excess of its liabilities and can pay off its debts, plus interest, within a twelve month period. In forming that view, they will convene a meeting of shareholders to propose to them that they agree to place the Company into Members Voluntary Liquidation. The shareholders will, after payment of any debts, receive any surplus funds that are available. These funds are distributed on a pro-rata basis and usually attract 10% tax known as Entrepreneurs Relief, thereby effecting a significant saving for most shareholders. Usually, if a Company’s surplus assets are in excess of £25,000, an MVL process will likely be the most tax efficient way to conclude its affairs.
Why and when should you consider a Members Voluntary Liquidation?
- The Company has reached its natural conclusion and it has ceased trading
- The shareholders want to extract their investment in the Company in the most tax efficient manner
- The Company needs to undergo a restructure.
- The Company’s directors and/or shareholders are retiring.
- The Company is in a position to sell its business and assets.
What are the tax advantages of placing your Company into Members Voluntary Liquidation?
- Surplus funds held by a Company can be classed as Capital Receipts and could be, with correct planning, distributed to shareholders who pay Entrepreneurs Relief, a tax rate that could be as little as 10%
What other advantages does a Members Voluntary Liquidation provide?
- It is a relatively quick and easy procedure. Usually from first meeting the directors and providing appropriate advice, the formal MVL process can be started within a matter of days.
- With careful tax planning, early distributions of surplus funds can be made to shareholders almost immediately upon the appointment of a liquidator.
- The directors’ powers and responsibilities cease and the liquidator takes over the responsibility of filing the necessary statutory accounts at the Registrar of Companies.
- The whole Members Voluntary Liquidation process can usually be concluded within 6 months, with the Company being struck from the Registrar of Companies shortly afterwards.
Why should I choose CFS to be our nominated advisors?
- All advice and guidance is provided by a Licensed Insolvency Practitioner. To be appointed over any formal process, including a Members Voluntary Liquidation, a Licensed Insolvency Practitioner must be appointed.
- Our Partners are authorised by both the ACCA and the Department for Business, Innovation & Skills.
- We have offices in the Midlands and London and from those locations can cover the whole of the UK.
- We are acknowledged as having amongst some of the lowest fees in the profession. Our prices on Members Voluntary Liquidation projects can start from as little as £1,500 plus statutory disbursements.
- Will always work closely with a client’s current advisors to conclude a Company’s affairs in an efficient and timely manner.
UK Wide Support for Businesses from our Offices in London & Nottingham
If you are considering a MVL process, contact us today and we will provide you with free advice and a no obligation consultation. We can be contacted via telephone, email or if you would prefer, simply fill in our enquiry form and one of our Licensed Insolvency Practitioners will get in touch with you within 24 hours.
We have offices in London and Nottingham in the Midlands, from which we provide a UK wide service to businesses.
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