F.A.Q.
Common questions about Members Voluntary Liquidation’s (MVL’s).
Applying
for a MVL
Is a MVL right for me?
This is completely dependent on circumstances but if your business is solvent and you would like to close your business or you feel that it has come to the end of its life then a MVL is one option.
What does being solvent mean?
Being solvent, for the purposes of an MVL, means the company is able to repay all its debts within 12 months.
Find out if you are insolvent here
How much will a MVL cost?
We have a fixed MVL cost of £1,495 + VAT and disbursements. As long as you fulfil the terms and conditions, you obtain our MVL cost. Contact us for a more detailed quote on the cost of your disbursements.
How do my assets get realised?
The business assets can be sold or distributed ‘in specie’ (current form), the shareholders will receive assets as cash or in their current form, subject to taxation.
How long does it take to carry out the MVL?
MVL’s are a quick process to put your company through. However, they can be slowed down due to some third party actions such as your bank transferring your company’s money to you after you give notice to your bank.
I have carried out an MVL before, can I do it again?
Yes, there shouldn’t be any issue with this, however you should be aware that you should not use MVLs as a way to pay less tax year on year and you may wish to take specialist tax advice on this point.
When there are multiple Directors in my company?
This is not an issue, as long as they all agree on the MVL procedure.
Why enter into an MVL, instead of striking my company off?
One of the main benefits for many is the tax benefit of the entrepreneur’s relief. The tax rate is set at 10% which is highly attractive in comparison to current Capital Gains tax rates.
What meetings need to be held?
There should be a meeting of shareholders prior to appointment of IP to make sure they are all in agreement of entering the company into a MVL.
What advertisements do i need to run?
This will need to be advertised in the Gazette, but otherwise there is no other need to publicly advertise your company’s MVL.
What if?
I have assets overseas
This depends on the price of assets involved and their location etc. Contact us and provide us with as much information as possible so we could advise you on whether we would be able to do this for you and its cost.
What happens to my employees during an MVL?
In many situations, employees will have been made redundant long before you apply for a MVL.
Other directors object to the MVL?
If there is a serious dispute and directors can’t agree, then you can apply to the court for a compulsory liquidation. However, you should be aware that this will be an expensive procedure.
I am moving abroad before the MVL finishes
This will not be a problem as long as we can still contact you.
I enter an MVL then realise my company is insolvent
If you realise that your company is insolvent after entering into a MVL, you will not be able to continue with the process and the liquidator will move it to a CVL.
Can I?
Continue to trade through a MVL?
There is no reason why you can’t continue to trade through a MVL as you are not insolvent but there is not much point in doing so if you want to end the company of your own volition anyway.
Be a director of another company whilst being in a MVL
You can be the director of another company whilst being in a MVL; this shouldn’t be an issue as long as you have no director restrictions on yourself.
Minimise the cost of an MVL?
For limited companies, you should be able to keep your current trading name as long as you follow the correct legal procedure. You will need to obtain legal advice and there is a cost involved with this.
Minimise the cost of an MVL?
We have a fixed price for our MVL, as long as you fulfil our terms and conditions you will qualify for our fixed fee.
General
Why do I need an Insolvency Practitioner for a MVL?
Even though your company is solvent, it is a legal requirement to use an insolvency practitioner to complete the MVL process for you.
Can shareholders change their mind once an MVL is agreed?
The shareholders can change their mind once a MVL has been agreed. However, this is dependent on the stage of the process, there is likely to be a cost involved for doing this and the procedure will then not go through.
What happens to my credit rating after a MVL?
Nothing will happen to your creditor rating after an MVL, regardless of what type of company you put through the process, as your company was solvent. There will be no ramifications or penalties placed on your credit rating as a result of a MVL.
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