Home~Company Closure~Members’ Voluntary Liquidation

Your company must be solvent (be able to pay all of its debts) and be no longer needed.

An MVL will quickly unlock

surplus cash in your company

An MVL provides

a more tax efficient way to withdraw surplus cash than salary or dividends

If you qualify for

Entrepreneurs Relief, your tax bill could be as low as 10%

Use when

your company has achieved its purpose and is no longer needed

An MVL will

provide a greater degree of finality against any unknown claims

We work as MVL specialists

alongside your existing accountants and tax advisors

What is a members’ voluntary liquidation?

A members’ voluntary liquidation (MVL) is used to close a company down when it is no longer needed. The important point is that the company must have sufficient cash or assets to pay all of its debts in full – it must be solvent. This is also known as a solvent liquidation. Any surplus assets and cash to be returned to the shareholders after all liabilities are paid is taxable as a capital gain, rather than income. This makes an MVL more tax efficient than striking the company off.

Why use an MVL?

  • Surplus cash is usually taxed at a lower rate as it is treated as a capital gain rather than income

  • Provides finality and protects against unknown claims coming forward later

  • Assets can be distributed in “in specie” so properties do not have to be sold

What are the steps of an MVL?

Instruction

We will require the company’s latest accounts and details of the assets and liabilities. We will provide a statutory declaration for you to swear with a solicitor to confirm the company is solvent.

Appointment

we will provide all formal notices and documentation to place the company into liquidation. We will notify HMRC, Companies House and others.

Distributions

we will declare dividends to shareholders as soon as practicable. Available cash is distributed within 5 working days. We will agree timings of dividends with you to suit your individual tax circumstances.

Closure

We will obtain all necessary tax clearance from HMRC and apply for the closure of any VAT, PAYE and corporation tax accounts. We will then arrange for the dissolution of the company at Companies House.

Leading

If you are looking for an effective, low cost and tax efficient way to close your business, a Members Voluntary Liquidation (MVL) could be the answer. An MVL is a legal process that allows shareholders to liquidate their company providing it is solvent. This means that the business must have enough funds to pay all of its liabilities.

There are many reasons why you might consider an MVL, such as:

  • Retirement

  • Company has achieved its purpose, e.g. a property development

  • Extracting surplus cash

  • New contract for IT specialists, offshore workers and other contract workers

  • Following a business and asset sale where you retained the company’s shares

  • Potential to claim Entrepreneurs’ Relief

At Leading we understand that business owners want a fast, reliable service giving them the advice that they need, when they need it, at the best price possible. That’s why we offer free initial consultations and should you decide to go ahead with an MVL, we will give you a fixed fee quote and be on hand every step of the way to guide you through the process.