A Members’ Voluntary Liquidation (MVL) (or Solvent Liquidation) enables shareholders to put a solvent company into liquidation in order to unlock their capital. It can be used to secure an orderly winding up of a company or to close down a subsidiary (within a group of companies) that has outlived its usefulness.
Shareholders appoint a Liquidator, and a Statutory Declaration of Solvency is required, stating that the directors have conducted a full enquiry of company affairs and believe that it can repay its debts, with interest, within a 12-month period.
The Liquidator is appointed at an extraordinary general meeting of the company, if approved by 75% of shareholders’ votes. The Liquidator realises the company assets, settles any creditor claims and distributes the remaining assets to shareholders.
Our partners are licensed insolvency practitioners, so they can accept appointments as Liquidators, using their industry knowledge to seek optimum results that will benefit all parties.
It is extremely important that the full tax implications are considered by the directors before selecting the Members’ Voluntary Liquidation option. A solvent liquidation is a great way of releasing funds that would otherwise be lost to taxation for any purposes deemed worthwhile by business owners. It can be structured in a way that allows a business to continue operating as normal and potential to prepare more effectively for the future.
You can call a Begbies Traynor specialist directly at any of our offices around the UK and arrange a free and confidential consultation to discuss your solvent liquidation queries.