Members Voluntary Liquidation (MVL)
If your company is Solvent then you may decide to alternatively enter into a Members’ Voluntary Liquidation (MVL). In order to do this you must enlist the assistance of an experienced Insolvency Practitioner to liquidate your company.
Free Confidential & Impartial Advice
Nationwide – Confidential – Impartial – Experienced
What Is a Members’ Voluntary Liquidation (MVL?)
If your company is Solvent then you may decide to alternatively enter into a Members’ Voluntary Liquidation (MVL). In order to do this you must enlist the assistance of an experienced Insolvency Practitioner to liquidate your company.
Depending on the level of assets and funds remaining in the business, this may be the most tax efficient way of closing your business. Funds distributed to shareholders through an MVL are treated as capital gains and not taxed in the same way an income would be. The shareholders are usually entitled to Entrepreneurs relief and taxed at 10%. The process usually takes no longer than six months dependant on the company structure and complexity.
How do I enter a Member Voluntary Liquidation
The majority of Directors will need to sign a ‘Declaration of Solvency’ which states that a full enquiry into the company’s affairs has been completed. It also states that it is the opinion of the Directors’ that the company is able to pay all of its debts within 12 months of the commencement of the liquidation. This is also accompanied by a statement of assets and liabilities.
There are significant consequences if the declaration is false or incorrect which is why you should enlist the assistance of an Insolvency Practitioner at an early stage.
A general meeting is then called at least five weeks later where a resolution is passed for voluntary winding up the company. An authorised Insolvency Practitioner is then appointed to wind up the company.
Advantages
- The process does not last longer than one year
- Lower tax rates applied to shareholder distributions
- Potential access to entrepreneurs’ relief, reducing the tax rate payable
- Company is closed with no outstanding issues
Disadvantages
- There are significant consequences if the ‘Declaration of Solvency’ is incorrect
- The control of the company’s assets is passed to the Insolvency Practitioner
Contact Us
Address
JT Maxwell Limited, Unit 1, Lagan House, 1 Sackville Street, Lisburn, BT27 4AB.
Telephone
Call free on 0800 0465 029
Free Call Back
Request A Call Back
100%
Customer Satisfaction
Still Have Questions?
Don’t hesitate to reach out to us anytime
F.A.Q.
What should I do if insolvency appears likely?
Do not bury your head in the sand! If you are a company director, you should certainly not just resign (which could be a breach of your duty as a company director) and do not just continue to trade (which could lead to personal liability). Take advice as soon as possible and act on that advice and, in particular, do not transfer assets without first obtaining advice.
What are the consequences of being a director of a company which has been put into administration or liquidated?
You could be made personally liable for your company's debts and could face criminal prosecution, a fine, and/or disqualification as a director. If you have personally guaranteed the company's debts you will be required to honour those guarantees. For the next five years you are not allowed to be a director of another company with a similar name without the court's permission.
Will I be disqualified as a director?
In reality this seems unlikely as less than 10% of directors of insolvent companies are disqualified. But disqualification proceedings may be brought if warranted by the directors conduct, but even in those cases the Insolvency Service would usually seek to obtain an undertaking from the director which has the same effect as a disqualification order. The minimum period of disqualification is 2 years and the maximum 15 years and prevents an individual from being a director of a company or being concerned in or taking part in the promotion, formation or management of a company.
Will I have to face the company’s creditors?
If there is an insolvent liquidation, then a meeting of creditors must be convened. In a creditor’s voluntary liquidation, a director is required by statute to attend and chair the Meeting of Creditors, however in a Court liquidation this is at the discretion of the interim Liquidator.
About Us
Our aim here at JT Maxwell is to help change the perception of our industry. And the reason for this is simple: we passionately believe that the service which we provide is incredibly valuable, not just for businesses, but also in a personal context.
Address
JT Maxwell Limited, Unit 1 Lagan House, 1 Sackville Street, Lisburn, BT27 4AB.
Newsletter Sign Up
Sign up for our weekly newsletter today.