What is a Members Voluntary Liquidation (MVL)?
A Members' Voluntary Liquidation is used to formally close down a company that is solvent as all creditors owed money will be paid in full. The process also provides a cost effective and tax efficient manner in which to distribute its assets to its shareholders. Therefore, an MVL can also be used as part of a restructuring arrangement such as a S.110 scheme arrangement.
From our years of working alongside tax advisors we have been using solvent Liquidation otherwise known as a Members Voluntary Liquidation (“MVL”) as a tax efficient exit route for shareholders to unlock their investments as well as a useful procedure to disseminate a single company that undertakes many different services and products into separate legal entities or contradictory it can be used to ‘tidy up’ complex group structures.
Why use a Members Voluntary Liquidation?
- Tax planning - Taking advantage of changes in tax legislation when it may be appropriate to withdraw capital, or alternatively divide the business interest between shareholder groups and mitigate or defer tax liabilities (S.110 reorganisations).
- Retirement planning - Shareholders who are considering retirement and wish to realise the value of their investment. A liquidator has the power to accept or reject claims of creditors and can disclaim onerous assets, such as leases, if appropriate.
- Group reorganisations - The removal of dormant, non-trading or redundant companies in order to reduce costs, group restructuring or the release of capital for use elsewhere within the group.
- End of specific purpose - The orderly closure of a company which has achieved the specific purpose for which it was incorporated.
Why Kingsland Business Recovery?
Here at Kingsland Business Recovery we are insolvency specialised and therefore work closing with the Company’s accountants and tax specialists in order to ensure each client receives all the necessary advice and information upfront. We also focus on ensuring our costs remain competitive and therefore a typical MVL process will start from £2,500. This will include our fees as Insolvency Practitioners appointed to act in the matters, VAT and disbursements.
Should you have any queries or would like a quote please contact us.