Members Voluntary Liquidation

Members Voluntary Liquidation

Expert Company Liquidators – Let Us Liquidate Your Company

  • Have your solvent company liquidated quickly, effectively at an affordable price.
  • We are licensed and regulated as expert company liquidators.
  • We prepare all of the paperwork for you and advise you throughout.
  • We’ve been liquidating companies for over 40 years.

Read all about Members’ Voluntary Liquidations below or watch our video. It’s around 10 minutes long.

Want to be clear on who does what in a Members’ Voluntary Liquidation; open our MVL Process PDF here: Members Voluntary Liquidation Process

MVL Cost: If cost is your first question please take a look at our very competitive rates here.

 

 

What is a Members’ Voluntary Liquidation?

An MVL is another name.

An MVL is for owners to close a company.

As a Company Member you are often known as the shareholder or owner.

A company must be able to pay what it owes. Known as being solvent.

Our role: help you decide if an MVL is right for you. Work with you to plan and put in place a solvent liquidation for your company. Be the liquidator of your company.

Your role: work with your accountant and us to see if an MVL is the best choice.

MVL Cost: If cost is your first question please take a look at our very competitive rates here.

Examples of When to Use an MVL

  • Moving from contracting to a job.
  • Retiring.
  • Completing a project.
  • A company is no longer needed.

Tax Benefits – Key Points

In brief: payments to owners are taxed as CGT. Entrepreneurs Relief may be available. CGT is short for Capital Gains Tax.

Our role: check you have tax advisors in place. Set out costs as part of your tax benefit calculation.

Your role: work with your accountant to see your tax benefits of an MVL.

Funds paid from an MVL are usually capital.

Tax is under CGT rules.

CGT is a tax on a person.

Funds over £25,000 will be under CGT if an MVL is used.

Funds paid without an MVL will be treated an income. CGT tax rates are lower than income tax rates.

An MVL pays the company funds to its owners. The owners pay tax under self-assessment rules.

An MVL may allow for Entrepreneurs’ Relief. This is a personal tax relief. The tax rate can be as low as 10%.

We are not tax advisors. Please take tax advice.

Your accountant can work out the tax benefit of using an MVL.

 

How Do Company Owners Get Their Funds?

In brief: owners can receive company funds before or during an MVL liquidation.

Our role: agree a plan with you. Deliver on our part of the plan.

Your role: decide when you want your funds.

MVL liquidators take control of company funds.

The funds in the company bank account will be paid to the MVL account.

Payments to company owners are from the MVL bank account.

Owners may plan to pay funds to themselves before liquidation. A Directors’ Loan Account would show the value of the funds received.

The liquidator clears the directors’ loan account to nil. This is from what’s due to the owners.

This works when the directors are also the owners. The liquidator will not move any funds in this case.

Try to pay all company taxes due before MVL. This will avoid an interest charge.

 

How are Company Owners Protected?

In brief: insurance protects company owners against wrongdoing by the MVL liquidator.

Our role: put the correct level of cover in place. Act with honesty and integrity. We have been in business for over 40 years.

Your role: confirm the value of the company funds.

An MVL cost is an insurance bond. In Scotland this is called Caution. In England and Wales this is called Security.

The bond protects against fraud or dishonestly by the liquidator. The bond issuer is jointly liable for any losses.

Professional indemnity insurance covers negligence. The bond does not cover for negligence.

The bond cost varies with the value of funds.

 

Members’ Voluntary Liquidation Process

Want to be clear on who does what in a Members’ Voluntary Liquidation; open our MVL Process PDF here: Members Voluntary Liquidation Process

In brief: the MVL process is set by law. How long it will take is flexible with planning.

Our role: ensure the correct process is followed. Explain the process to you and your accountant.

Your role:  ask any questions that you would like answers to.

Instruct an Insolvency Practitioner

Our role: our Managing Director, Richard Simms, will be liquidator.

Your role:  ask any questions that you would like answers to.

The Insolvency Act set out the MVL process.

An Insolvency Practitioner must be the liquidator.

 

Pick a Date for the MVL

Our role: agree a date with you and your accountant.

Your role: When is your company no longer needed? When can you be available for meetings? When do you want your funds?

The MVL date is the start of a new accounts period.

The company’s accounts period is the day which the annual accounts are up to.

A company can change its accounting period end.

For example, if the accounts date is 30th June and the MVL date is 1st October. Accounts will be needed from 1st July to 30th September.

The company will set an MVL date in advance.

 

Board Meeting – Meeting of the Directors

Our role: prepare papers for the meeting.

Your role: attend the meeting. The location is your choice.

The company directors hold a Board Meeting.

The board meeting calls a meeting of the company owners, which is called an Extraordinary General Meeting or EGM.

Members are told in advance of an EGM. Advance warning is known as “notice”. Owners can agree to “no notice”.

Using “no notice” means the process can be fast.

 

Declaration of Solvency

Our role: prepare the declaration.

Your role: swear the declaration in front of a solicitor or notary. The date and time is to suit you.

A Declaration of Solvency proves a company can pay what it owes.

This shows the financial position of the company.

The company directors swear this in front of solicitor or notary.

The company directors swear  the Declaration. This must be in front of a Solicitor or Commissioner of the Oaths for companies registered in England and Wales. For Scottish registered companies this is in front of a Notary Public or Justice of the Peace.

The figures for the Declaration are provided by the company’s accountant.

 

Notice to Company Owners of an Extraordinary General Meeting EGM

Our role: prepare papers giving notice.

Your role: receive notice

Members are told in advance of an EGM. Advance warning is known as “notice”. Owners can agree to “no notice”.

Usually up to 21 days’ notice is needed.

Shareholders can agree to short or “no notice”.

 

Extraordinary General Meeting – EGM

Our role: prepare papers for the meeting.

Your role: Attend the meeting. Sign and return the papers. Much can be done through electronic signing.

The EGM is to put the company into MVL. A decision by the company owners is known as a resolution.

A Special Resolution places the company into MVL. An Ordinary Resolution appoints the Liquidator.

 

Distribution of Funds

Our role: if needed pay funds. Or prepare papers to confirm a distribution.

Your role: Pay funds in advance. Or receive funds from us. We will check your account details on several occasions.

After the EGM funds can be paid to company owners.

Owners may plan to pay funds before liquidation. The value of the funds will be shown as a Directors’ Loan Account.

The loan account is cleared by the value of funds due to the shareholders. This works when the company owners are the company directors.

In this case no funds are moved by the liquidator.

 

Appointment Notification

Our role: we will prepare and post the adverts and notify Companies House.

Your role: nothing for you to do here.

The liquidator advertises in the Gazette.

This confirms the EGM has taken placed.

 

Clearance from H M Revenue & Customs

Our role: work with HMRC to check that all tax matters have been completed.

Your role: arrange with you accountant the completion of any pre-liquidation outstanding tax matters.

We will request confirmation from HMRC that there are no outstanding matters.  The MVL Liquidation process can then be finalised.

 

Removal from Register

Our role: we will apply to have the company removed from the register.

Your role: nothing for you to do here.

After liquidation we will request that the company is removed from Companies House.