TAKE CONTROL OF YOUR DEBT AND MOVE FORWARD TO A BRIGHTER FINANCIAL FUTURE
Members Voluntary Liquidation (MVL)
You can only use an MVL if your company is solvent (i.e. it can pay all of its debts).
You may wish to pursue an MVL if:
- You want to realise the assets of the business for yourself and other shareholders in a tax efficient manner
- The company has completed its contract and the director/shareholder has found employment elsewhere
- You want to step down from the family business and nobody else wants to run it
- You want to retire
There are a number of tax benefits to using an MVL. Subject to personal circumstances, funds that are distributed through an MVL are subject to lower rates of taxation.
Depending on the amount of capital that’s tied up in your business, withdrawing the money may be treated as a low-tax capital gain rather than a higher-tax income or dividend.
You may also qualify for Entrepreneur’s Relief and benefit from a 10% tax rate on distributions.
How it works
Directors should seek professional advice both for the company and for themselves personally in respect of their own tax affairs.
The Insolvency Practitioner will start preparing all the necessary documentation that will need to be agreed by shareholders. A meeting of the board will decide when and how an MVL resolution takes place and the Directors must instruct an Insolvency Practitioner to formally begin the process.
To pursue a MVL, the directors on behalf of the company, must make a statutory declaration that states that the company will be able to repay its debts (and interest) within a fixed period, not exceeding 12 months. This is a legal document, backed up by a company’s balance sheet.
Members’ meeting or written resolution
Members will vote on whether to pursue an MVL. The resolution will pass if three-quarters of the members (based on shares) are in favour of it. Voting can either be at a meeting or in the form of a written resolution.
Liquidation appointment and realisation
Once a resolution has been passed, the appointed liquidator will fulfil the rest of the legal obligations required for an MVL, including dealing with claims from creditors and obtaining clearance from HMRC.
The Liquidator will then distribute surplus funds to shareholders and prepare statutory reports on the liquidation.
Umbrella.UK Insolvency has experience handling MVLs for a range of small and large clients. Get in touch with Umbrella.UK Insolvency today for a free*, confidential consultation. Call: 0800 611 8888, email us or visit our dedicated website for more information
*We don’t charge for an initial consultation, but it may lead to an insolvency solution where our pre-appointment costs are reimbursed as part of the fee structure that creditors approve.
Umbrella.UK is a trading name of Umbrella Accountants LLP. Registered Office: Bollin House, Bollin Link, Wilmslow, Cheshire, SK9 1DP: Company Number OC360021. Data Protection Number Z2517380. VAT Registration Number 107346824.
Thomas Fox LLB MIPA is an employee of Umbrella Accountants LLP and is licensed to act as an Insolvency Practitioner in the UK by the Insolvency Practitioners Association. Professional Indemnity Insurance - In accordance with the disclosure requirements of the Provision of Services Regulations 2009, the firm’s professional indemnity insurer is Arch Insurance (UK) Limited, 5th Floor, Plantation Place South, 60 Great Tower Street, London, EC3R 5AZ.
The territorial coverage is worldwide excluding professional business carried out in the United States of America or Canada and excludes any action for a claim brought in any court in the USA or Canada.
I would like to say a very big "Thank You" to your lady on the telephone this morning who helped me start getting my life sorted and debts managed. So thank you "Sarah" great help... thank you again.L Smart
Thank you so much for your help with my IVA. As an ex-company Director my life took a downward spiral when creditors from my liquidated company called upon my personal guarantees. I had been treading water for months, ran up credit card debts and borrowed from family. When a creditor instigated bankruptcy proceedings against me I thought I was going to lose my house. I contacted Umbrella.UK Insolvency who stopped all the phone calls and threatening letters. Umbrella Insolvency explained things in a way I could understand. They negotiated with creditors and my IVA went through, now I can sleep at night again and I kept my home. Thomas Fox was extremely knowledgeable and I truly thank him and his team.Paul G
Thank you very much for your assistance in a successful proposal. We are ever so grateful as this is a chance to transform our lives; or rather you have given us a second chance to have our lives in order. Thank you for your patience and perseverance throughout that you showed.NP
I engaged Tom to arrange an IVA for me after I ran into financial difficulties as a result of the closure of my company. He introduced me to Sarah and both of them as a team worked tirelessly through Lockdown to get the best outcome for me and my family. Both Sarah and Tom were patient, thorough and incredibly compassionate for our situation. They attained the best outcome for us and I couldn't speak more highly of them. Thank you to you both, Amazing work.DH
Before I came to Umbrella.UK Insolvency I was in a bad place mentally due to debt because I believed I would be in my current situation for a long time to come. Umbrella Insolvency walked me through my options and helped me pick the best one. I am genuinely amazed at what they managed to do for me and can now afford to live comfortably, and without the constant worry of debt looming over me.MT
First of all, I would like to say a BIG Thank You for all of your assistance over the past year. I would not be in the positive state of recovery without Umbrella Insolvency. Your care and assistance at the application stage last summer, along with the advice throughout the year, has been great. I would not hesitate to tell anyone in my negative situation where to turn to.Mr TM
I'd just like to thank both you and Tom for your help with the closure of my company. You have been highly efficient and very professional throughout. Thank you.Tony D
Efficient & proactively managed very quickly. Umbrella.UK Insolvency guided me as sole Director of my small limited company, and the shareholders, through every step of a Members Voluntary Liquidation in a very efficient manner. The steps required were clearly laid out and proactively managed by their licensed practitioner. From first meeting through to an interim distribution of funds to shareholders took only a few days in our case. Thereafter, Umbrella will be managing all of the downstream actions required to complete the process with HMRC and Companies House, through to the final discharge of the company.Alex O
I extend my appreciation of your professional efficiency in handling my company business and herewith say thank you.Maxine R
I would like to thank Sarah and her team for all the hard work they have put into helping me sort my finances out once and for all. Without this IVA I would still be struggling every month trying to make ends meet. I received nothing but an efficient polite service every time I spoke to a member of your team and I'm so very grateful. Thank you so much. Natasha R