What is the Members’ Voluntary Liquidation process

1. Whatisthe Members’ Voluntary LiquidationProcess?

2. Introduction Once the company has proven to be solvent and the directors, and shareholders, have agreed to an MVL, an insolvency practitioner (IP) is appointed as liquidator to handle the MVL process. A series of steps that must be adhered to are taken by the IP.

3. Step 1 – Declaration of Solvency The IP and directors prepare the final company financial Declaration of Solvency. This must be done before the MVL can go ahead. It declares that the company is able to repay all its debts, as well as contingent liabilities, within 12 months of the Declaration’s date. All creditors are informed of the intention to close the company. unexpected claims arise at this point. This may determine whether the company is solvent or not. statement and Sometimes,

4. Step 2 – The shareholders’ meeting The directors will either convene a shareholders’ meeting or send a written resolution to the shareholders’ informing them of the intended company closure and their reasons. At least 75% of the shareholders must agree to the MVL within 5 weeks from the Declaration of Solvency being filed with Companies House. In addition, the resolution is advertised in the London Gazette within 14 days. Once agreed by the shareholders’, the IP also officially notifies creditors of the intended company closure within 28 days. They can proceed with the Members’ Voluntary Liquidation process.

5. Step 3 – Liquidating the business The appointed liquidator officially starts the Members’ Voluntary Liquidation process. The company’s remaining assets are valued and sold at market price by the liquidator and any creditors that remain are paid in full from the company’s cash reserves or realised assets. The shareholders of the company by the liquidator. All distributions are taxed as capital instead of income in an MVL. Shareholders that qualify for Business Asset Disposal Relief can effectively reduce the rate of tax even further to 10% once the company has been closed. remaining funds are distributed to

6. Step 4 – Removing the company from Companies House’s Register Once the liquidation process has been completed and realised assets, as well as remaining funds, have been distributed, the liquidator obtains final clearance from HMRC. At this point, most liquidators convene a final meeting, albeit currently on a remote basis, with shareholders. The final documentation is filed with Companies House and a second notice is placed in the London Gazette to confirm the company is now closed. Within a 3 month period, it will be removed from the Register at Companies House and the company will no longer exist.

7. Thankyou! If you are considering closing a solvent company using a Liquidation process, contact Simple Liquidation for assistance. Company insolvency is not something that anyone wants to deal with. For more information on how our professional insolvency practitioners may be able to help your business, contact us today on 0800 246 5895 Members’ Voluntary or individual www.simpleliquidation.co.uk mail@simpleliquidation.co.uk