- Posted by admin
- On August 16, 2018
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There are many group companies that have many dormant subsidiaries on their balance sheets. They may have been set up as a SPV (a special purpose vehicle) entity for a joint venture or project that required that the assets and liabilities were kept out of the way from the parent company. In many cases, the project or venture has finished and the company may lie dormant for years.
Whilst company’s are lying dormant in the balance sheet, there are administrative burdens which need fulfilling, such as the filing of annual returns and dormant account, fines associated with missed filing deadlines and extra work in including them in consolidated group accounts.
You may have the intention of striking-off these companies at Companies house, but the risks of doing this incorrectly put you off taking the action, so you just leave them until a later date.
A way of clearing your balance sheet, would be to instruct an Insolvency Practitioner to carry out members voluntary liquidations (MVL’s) on the dormant companies. This would be appropriate if the companies were solvent or would become solvent if inter-company debt was written off by the Holding Company. The cost of MVL’s are usually a lot higher than with striking off but at Revive Business Recovery we have streamlined the process to allow MVL’s to be carried out on many subsidiaries (at the same time), thus reducing the cost and making them affordable. They can be as little as £500 plus VAT plus disbursements for each company if done in batches of 10 or more.
We also work extensively with tax professionals who can advise on the moving of assets and liabilities between companies in a group to determine whether there would be tax savings to be had at the same time.
If you are interested in clearing your balance sheet or looking at whether there would be any tax benefits to be had by your company from re-structure, please contact us.
Initial advice will be by way of a phone call and if it is appropriate, it may be followed by a meeting at a location and time to suit you, which is all free and confidential
Please contact Claire Foster on 01302 965485 to discuss this further or alternatively email firstname.lastname@example.org.