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Members' Voluntary Liquidation

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What is a Members' Voluntary Liquidation?

While liquidation is often associated with insolvent companies, there are in fact many reasons why you may be considering closing your profitable company using such a process.

Closing a solvent company

Perhaps you are approaching retirement and there is no one suitable to pass the business on to, maybe you are moving on to a new venture, or the market may have simply moved on rendering your company surplus to requirements. Regardless of the reasons for bringing an end to your solvent company, a formal liquidation process known as a Members’ Voluntary Liquidation – or MVL could be the most beneficial way for you to achieve this.

Concerned about potential BADR changes?

We recognise that Business Asset Disposal Relief (BADR) plays a crucial role in promoting entrepreneurship and investment in the UK. Although BADR provides a tax-efficient way to exit business ventures, potential tax reforms could affect its future. If you are a company owner or director considering closing your solvent business and exploring options such as MVL for its future, reach out to our Business Recovery and Restructuring team to benefit from their expertise.

MVLs and Entrepreneurs’ Relief

An MVL allows for all proceeds tied up in a company to be extracted and distributed to shareholders in a tax-efficient manner. With an MVL, funds are paid out via capital distribution, meaning that distributions are taxed as capital gains rather than income. In many cases shareholders will be able to take advantage of Entrepreneurs’ Relief, which reduces the tax liability further, down to just 10%. Entrepreneurs’ Relief has a lifetime limit of £1m per person and is available to those disposing of the shares of a trading or holding company or group which they have held at least 5% of the voting rights for at least two years.

Director Redundancy Entitlement – Did you know that as a limited company director, you may be entitled to claim redundancy if your company enters into an insolvent liquidation process? We can point you towards a fully regulated third party who can provide advice on your right to claim director redundancy if this is applicable to your situation. To understand if you are entitled, give a member of our team a call on 0800 063 9262, or email [email protected].

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Jonathan Munnery
Insolvency & Restructuring Expert

If you are considering liquidation for your limited company, taking advice from a licensed insolvency practitioner can help you understand your options.

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Ready to start liquidating today? Complete the form and a member of our team will be in touch.
Please note: By completing this form you are not liquidating your company
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Testing a company’s solvency

The MVL process is particularly suited to companies with in excess of £25,000 worth of cash and assets to distribute. This is an alternative to striking off the company using a DS01 form which would see all profits classed as income and taxed accordingly. MVLs are only suitable for solvent companies. A company’s solvency will be tested using the following metrics:

  • Pay in full all of its current liabilities within 12 months
  • Pay any interest due within 12 months
  • Settle any contingent liabilities which arise or are still ongoing at the time of closure.

Start your online liquidation today

If you have decided liquidation is the right option for your limited company, you can take the first step and begin the process online using our online portal. Starting the process is quick, simple, and can be done at a time that suits you. Your information will be submitted to your local UK Liquidators insolvency practitioner who will be with you every step of the way. Click here to start your company’s liquidation online.

Shareholders will need to sign a sworn Declaration of Solvency as part of the MVL process to testify to the company’s solvent nature.

Is liquidation the right option for you?

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The role of a licensed insolvency practitioner

As a formal liquidation process, an MVL can only be entered into under the guidance of a licensed insolvency practitioner who will assume the role of liquidator. An MVL works in much of the same way as an insolvent liquidation, with the liquidator responsible for realising the company’s assets, settling any ongoing disputes, before distributing the proceeds. They key difference is that with an insolvent liquidation, the proceeds would be paid to outstanding creditors, while in an MVL, the proceeds are distributed amongst the company’s shareholders. Following clearance from HMRC, the company will then be dissolved and its name removed from the register held at Companies House.

Officially the largest UK Liquidations Company
Supporting 25,000+ Limited Company Directors Nationwide
Approaching UK Liquidators to handle my CVL was one of the best decisions I could have made. The advice given was clear and easy to understand and the service was first class from start to finish.
Chloe Wright | CEO
When the time came to put my company into liquidation, I had no idea what to expect. However, my UK Liquidators insolvency practitioner patiently explained the process and also talked me through the alternatives.
John Lakeland | CEO
Right from my first call, with UK Liquidators, nothing was too much trouble. I was nervous about the process but was given a named contact from my first call, and they were only ever a phone call away.
Lucy McCann | Founder
You’re in safe hands with UK Liquidators

At UK Liquidators, our service is fully partner-led and your case will always be overseen by a fully licensed insolvency practitioner.

Meet The Team
Jonathan Munnery
Jonathan Munnery
Insolvency & Restructuring Expert
Matthew Cluer
Matthew Cluer
Director
Carolynn Best
Carolynn Best
Partner
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Ready to Liquidate?
Express Liquidation Service
Ready to start liquidating today? Complete the form and a member of our team will be in touch.
Please note: By completing this form you are not liquidating your company
Contact the UK Liquidators Team

If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.

  • Free initial consultation
  • Strictly confidential
  • Fully licensed insolvency practitioners
  • Local office support
  • Named case handler throughout
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