Reviewed 8th December 2023
MVL is a procedure commonly used by directors who wish to retire or move on from their current venture and where there’s nobody else to take on the business. We can advise whether an MVL is right for you based on your aims and intentions and the financial position of the business, providing support and guidance throughout.
Members’ Voluntary Liquidation is a formal insolvency procedure that requires the appointment of a licensed insolvency practitioner (IP). The business is closed down in an orderly manner and proceeds extracted in a cost-effective manner.
Funds extracted through an MVL are classed as capital gains rather than income, meaning they are subject to Capital Gains Tax (CGT) rather than Income Tax; this can represent a serious saving. Furthermore, you may be able to take advantage of Entrepreneurs’ Relief which will cut the rate of CGT down to just 10%.
Once shareholders have approved the MVL, the statutory process begins. This includes informing HMRC and Companies House, placing an advertisement in the Gazette, selling company assets, settling claims from creditors, and distributing surplus funds to shareholders.
Ensuring your business is solvent is a key consideration prior to placing your company into an MVL. If your company is actually insolvent a different procedure needs to be entered into; this is called a Creditors’ Voluntary Liquidation (CVL).
Making the initial decision to liquidate and close the company can be difficult, especially if you’ve run the business for some time. You may wonder whether it’s the right step to take, or if there are other options available, such as keeping it open but in a dormant state.
We can advise on all matters relating to Members’ Voluntary Liquidation, and have extensive technical knowledge and practical experience. You can get in touch with one of our partner-led team for more information and guidance – we offer free same-day consultations and operate a network of offices around Scotland.
Our debt report is completely easy to use and is a great starting point for anyone with over £5000 of debts looking to take control of their debt issues. By providing us with details of your incomings and outgoings we can suggest the most appropriate way forward for you.
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Whether you are a sole trader or a limited company director, we can help you work through your current financial problems including money owed to HMRCBusiness Debts
A Company Voluntary Arrangement (CVA) can help a company to escape debt by negotiating a formal payment plan with creditors allowing for reduced monthly repayments. Directors retain full control of their company during a CVA and the business is allowed to continue trading throughout.Find out More
When a limited company becomes insolvent, it’s important for directors to place the interests of creditors first and do all they can to minimise further losses. Creditors’ Voluntary Liquidation (CVL) is an insolvency process that allows this to happen, and ensures directors comply with strict insolvency laws.Find out More
A director’s loan account (DLA) can become overdrawn if too much money is taken from the company that isn’t salary or a dividend. Directors’ Loan Accounts are useful when operated with caution, but can be a cause of concern if the company becomes insolvent.Find out More
An insolvency practitioner is a licensed insolvency professional who is qualified to give advice and administer the full range of formal insolvency options.Find out More
A Winding-up Petition is a legal notice presented to the court by a creditor with a view to forcing a company into liquidation. If a winding-up order is granted by the court, compulsory liquidation can take place very quickly, and this signals the end of the company.Find out More
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