MVLs are only suitable for solvent companies. However, if your company is solvent and has over £25,000 to distribute, and you are looking to close down the business and extract these profits, then an MVL is likely to be the best solution. The alternative way to close a solvent company is by having it struck off – or dissolved – at Companies House.
This is a much cheaper option than an MVL, but it could end up actually costing you more when you take into account how the distributions will be taxed. Taking money out of the business by way of dividends is likely to incur a higher rate of tax when compared to extracting this as a capital distribution.
However, if you have a relatively modest level of funds within the company, an MVL may not be required. You are strongly advised to discuss your options with a licensed insolvency practitioner who will be able to confirm whether an MVL will be the most cost-effective option for you and your company.
An MVL is a formal liquidation process which must be undertaken with a licensed insolvency practitioner.
MVLs and CVLs are both formal liquidation processes, however, there is a key difference.
A Members’ Voluntary Liquidation – or MVL – is a formal liquidation process designed as a way for solvent companies to wind down their operations.
At UK Liquidators, our service is fully partner-led and your case will always be overseen by a fully licensed insolvency practitioner.
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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.
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