Is MVL right for my company?
A Members Voluntary Liquidation (MVL) is a liquidation process available to solvent companies only. It is a voluntary liquidation that may be pursued for a number of reasons. These include the retirement of directors, closure of a company after a merger, or simply closing the doors on a company that no longer serves a purpose. If you are looking to liquidate your company for one of these reasons, and have more than £25,000 to distribute between shareholders, then MVL may be the best option.
Is my company solvent or insolvent?
A company is insolvent when its financial situation has declined to the point that it can no longer meet its liabilities. If your company is struggling to meet payments on outstanding debt, rent, or regular bills, then it may be insolvent. If your company’s financial health is strong, and all liabilities have been or continue to be met accordingly, then it is likely that it is solvent.
Is my company solvent or insolvent?
What makes MVL tax efficient?
Members’ voluntary liquidation provides greater tax efficiency than striking off due to there being no obligation to pay income tax on distributions to shareholders. Thanks to the Extra Statutory Concessions Order (2012), taxes that would otherwise be imposed upon dissolution do not arise in MVL.
I need tax advice – can you help?
Unfortunately, Wilson Field does not offer advice on issues regarding tax specifically. We suggest directors and traders seek the help of tax advice professionals on such matters.
How much does MVL cost?
Wilson Field provides a three-tiered pricing structure in regard to MVL:
£1,695 + VAT & expenses
This option is appropriate for companies who have no outstanding liabilities at the point of liquidation, and simply require the company’s funds to be distributed between shareholders.
£1,995 + VAT & expenses
If your company has outstanding liabilities – debts yet to be settled, this price would be the most appropriate. This also covers companies that require assets to be distributed in specie.
Bespoke MVL + VAT & expenses
Our bespoke MVL service would see us handle the valuation and sale of any physical assets, as well as oversee any outstanding or disputed creditor claims against your company. We offer a free face-to-face meeting with one of our specialist consultants to discuss your situation, and also uphold constant support throughout the process.
Explore our MVL pricing structure in detail here
Why should I use an MVL when I can strike off my company?
While striking off may be the best option for some companies, if you have a bank balance of over £25,000 at the point of liquidation, it is unlikely to be the most suitable in your situation. The benefits of an MVL are clear for companies in this position, providing ease of access to funds, and tax benefits.
What are the benefits of MVL?
There are certain benefits to MVL that makes it a positive choice for solvent companies wishing to liquidate. These include:
The Extra Statutory Concessions order (2012) means funds of over £25,000 can be distributed to shareholders without income tax being imposed. This differs from dissolution, which would require such funds to be taxed upon distribution.
Quick cash-release/distribution turnaround
Subject to shareholders’ indemnity, HMRC do not need to give clearance before cash is released. We are usually able to distribute funds within seven working days of receipt of cash from the company’s bank.
Visit our page on the tax-efficient benefits of MVL here
Why do I have to pay expenses?
When a company begins liquidation proceedings, it is required that this is advertised in the London gazette in order to allow any uncontacted creditors to put forward their claims. expenses are a mandatory part of MVL, and comprise advertisements at several stages of the liquidation.
How quickly do shareholders get paid?
Subject to receiving the necessary consent from shareholders, as well as signed engagement paperwork, we aim to distribute funds within seven working days of receipt of cash from the company’s bank.
How can I be sure that my money is in safe hands?
Wilson Field are licensed and regulated insolvency specialists with experience in handling procedures for companies small and large. All of our insolvency practitioners, and operations as a company, are monitored by The Insolvency Service. All funds that pass under our care are properly handled and distributed appropriately.
I have used MVL before – can I use it again?
As long as your company is eligible for MVL, there is no reason why you should not be able to use the process again. MVL is not, however, to be used as a process to improve annual tax efficiency. For advice on your company’s tax situation, it is important to seek the advice of a professional advisor.
What happens to my company’s employees?
When your company liquidates, employees will be made redundant. As your company is solvent, it may have the funds available to cover redundancy payments. In any situation where this is not the case, employees are eligible to claim from the Redundancy Payments Service.
Visit the government’s information page on redundancy pay here
Book a free telephone consultation with one of our initial advisers