MEMBERS VOLUNTARY LIQUIDATION SUPPORT
If you’re a business owner looking to close your solvent company in an efficient and tax-effective manner, Members’ Voluntary Liquidations (MVL) could be the ideal solution. Regardless of whether you’re looking to restructure, retire, or simply wind down operations, our experienced team of is here to help guide you through uncertain times with clarity and confidence.
What is a Members Voluntary Liquidation?
A MVL is a formal process to voluntarily shut down a solvent business. Unlike many other types of liquidation, such as compulsory liquidation or a Creditors Voluntary Liquidation, a Members Voluntary Liquidation will be initiated by the company’s directors. The reason behind this can vary, but it usually boils down to a want or need to distribute the company’s assets amongst its shareholders — be this as part of a planned exit from the business or a restructure.
Members Voluntary Liquidations allow for an orderly means of winding down your company’s affairs on your terms. All assets during the process will be sold off and used to first pay back any existing creditors, before then distributing any remaining funds amongst shareholders.
A particularly popular liquidation method amongst business owners looking to properly tax-plan for the future, a Members Voluntary Liquidation allows shareholders to utilise tax relief such as Business Asset Disposal Relief, while retaining maximum control over your own situation.
Members Voluntary Liquidation vs Strike Off
Members Voluntary Liquidations and strike-offs are two of the most common methods for closing a limited company. A strike-off is generally seen as a less formal method of closing a business compared to Members Voluntary Liquidation.
Strike-offs are best suited for a ‘dormant’ business that hasn’t been regularly trading for a prolonged period, or has minimal assets, and involves removing the company from the Companies Register. Unlike Members Voluntary Liquidations, a strike-off doesn’t require a liquidator, and the process is generally quicker and less costly.
However, the business in question must not have traded or had significant levels of activity in the three months prior to strike-off. Additionally, any remaining assets belonging to the business may be taxed as income, which would be significantly less favourable than the taxation under a MVL. This means that, unless you’re a small or inactive firm, a MVL may be the preferred option for you.
Members Voluntary Liquidation: Pros and Cons
MVL Pros:
- Tax Efficiency: Any shareholder distributions are treated as capital, making it eligible to benefit from Capital Gains Tax relief.
- Professional Insight: A licensed insolvency practitioner (IP) oversees the process, ensuring everything follows the necessary legal process.
- Creditor Ease-Of-Mind: In a MVL, all debts are settled in full, protecting the company against potential consequences.
- Final: MVLs offer a formal and legal closure to the company’s affairs, providing finality.
Cons:
- Cost: MVLs can be costly as a result of fees for insolvency professionals.
- Time-Consuming: The MVL process may take months if the case has complex aspects (large number of assets or liabilities).
- Administration: In a MVL, a director must declare and prove solvency, requiring detailed financial statements.
Download our FREE Guide to Liquidation
If you’re a company owner looking to close down, whether your business is solvent or insolvent, liquidation could be an option for you. While ascertaining whether or not liquidation is for you isn’t so difficult, determining which of the different methods is right for your situation can be.
Our dedicated liquidation guide will educate you on the various different methods you’re faced with — to help you decide which is best-suited for you, providing you with the most upside possible. Click the button below to find out more!
Members Voluntary Liquidation Steps
Members voluntary liquidations involve several notable steps, all of which are necessary to ensure that the business in question is shut down in accordance with legal requirements, and shareholders are able to receive the appropriate returns with accuracy and efficiency.
The process can typically take from six months to a year. The main Members Voluntary Liquidation steps include the following:
Inquesta: Experienced Support for Members Voluntary Liquidations
At Inquesta, we are totally committed to providing a seamless and efficient Members Voluntary Liquidation process, tailored to the unique circumstances and needs of our clients.
Our team of licensed insolvency practitioners boast extensive experience handling MVLs across various industries, and for companies of a variety of shapes and sizes.
If you’re considering closing your solvent company via a Members Voluntary Liquidation, get in touch today for your free consultation. Our expert team is on hand to help you through the liquidation process and ensure a smooth and efficient closure.