A Members Voluntary Liquidation (“MVL”) is a tax-efficient way of distributing the assets of a solvent company to the shareholders.
A MVL is the most common method for directors and shareholders to realise company assets, including physical assets such as buildings, motor vehicles, and plant & machinery as well as cash at bank.
The MVL process must be overseen by a licensed Insolvency Practitioner and should be implemented when a solvent company needs to be wound up.
Once all creditors and taxes have been paid the surplus is distributed to the shareholders. In certain circumstances physical assets can be distributed as an alternative to money to the shareholders. i.e vehicles or property.
It is a tax efficient method of distributing company assets.
Entrepreneurs relief may be available on distributions.
It efficiently returns company value to shareholders.
It is an efficient retirement option for when there is no succession or sale of the business.
Shareholders can receive assets from the company in specie instead of cash (i.e. a Property or Vehicle).
A MVL is not appropriate if the company is deemed to be insolvent (Not in a position to clear its debts in full)
Swearing the declaration of solvency knowing that the company is insolvent, is committing a criminal offence.
If the company is insolvent, then alternative solutions are available and it would be more beneficial to discuss with a member of our team, to make sure that you receive the best possible advice for you and your company.
If you need any assistance or information regarding whether a MVL is right for you and your company then please speak to a member of our team on 0800 781 0014.