When
is an MVL appropriate?
Why
enter into an MVL instead of just striking
the company off?
What
meetings need to be held?
Do
the meetings need to be advertised?
What
will happen to the employees?
What
are the Liquidator’s duties?
Can
the assets be distributed between the members?
Are
any investigations required into
the conduct of the directors required?
How
much will an MVL cost?
Can
I do anything to minimise the costs of the
MVL?
What will happen if the company enters into a MVL and the company is unable to pay its debts?
When is an MVL appropriate?
This is only appropriate when the company is solvent
and the members no longer wish for it to continue.
Why enter into an MVL, instead
of striking the company off?
A company is struck off when an application is made to Companies House for the company to be removed from the register and dissolved. This can only be done if the company has not been active for the last three months.
Unlike an MVL, the striking off and dissolution procedure
does not release the directors or members from any accrued
liability.
A member or creditor has twenty years from the striking off to restore the company and pursue the liability. However, under an MVL only the Liquidator or an individual sufficiently interested can restore the company and this must be within two years of dissolution.
What meetings need to be held?
The directors would hold a board meeting to consider the liquidation and pass the resolution to call an extraordinary general meeting of the members.
A meeting of members would be held to pass the resolutions to place the company into Liquidation and appoint a Liquidator.
Do the
meetings need to be advertised?
The creditors’ meeting is advertised
in the London Gazette and one newspaper
which circulates in the area local
to the company.
In addition to this, an advertisement requesting submission of creditors' claims and noting the appointment of a Liquidator is also advertised in the London Gazette and one local newspaper.
What will happen to the employees?
Any employees at the date of the Liquidation will be
dismissed.
What are
the liquidator’s duties?
The Liquidator has the task of realising (selling) all the assets of the company at market value. The liquidated assets will then take the form of cash in the Liquidator's trust account.
The Liquidator will consider the claims
of the creditors and following the
deduction of fees, payment will be
made on the agreed claims in the order
of priority.
Can the assets be distributed
between the members?
The Liquidators can share the assets between the members of the company. For example, the company may hold shares in another company And these can be distributed to the members rather than the Liquidator selling the shares and distributing the cash to the shareholders.
Are any investigations required into the conduct of the directors?
There is no requirement for investigations to take place whilst an MVL is in place.
Are any investigations required into the conduct of the directors?
There is no requirement for investigations to take place whilst an MVL is in place.
How much will
an MVL cost?
The Liquidator is usually remunerated on a time cost basis. However, the fees are negotiable, are frequently capped and will depend on the complexity of the case.
Can I do anything to minimise the costs
of the MVL?
In order to keep the Liquidator's costs to a minimum, the following can be carried out by the company prior to their appointment:
utilise funds held in the bank to pay creditors;
sell any assets at market value and obtain valuations and retain documentation showing these transactions;
offset any mutual trade creditors' and debtors' accounts;
pay all employees the monies due to them;
pay all employees monies due to them;
submit any VAT, PAYE and Corporation Tax returns
and pay monies due;
write to debtors and obtain payment, settle disputes
and compromise debts;
ensure all books and records are up to date;
prepare accounts to the cessation of trading;
and
obtain details of any obligations which have not
been fulfilled in relation to leasehold properties
or other contracts.
What will happen
if the company enters into an MVL and it is then
discovered that the company is unable to pay
its debts?
The company will be placed into a Creditor’s
Voluntary Liquidation immediately.
The Liquidator will also report this to the DTI
and will be obliged to carry out an investigation
into the director’s conduct.
We understand
that you may require guidance and encouragement to
help you through these difficult times.
 |
Website designed by greymatter - Web Design Sheffield |
All website contents © Wilson Field 2006 | Disclaimer Email: info@
wilsonfield.co.uk Tel: 0800 458 3320
