What is an MVL?
When the shareholders of the solvent companies decide to close it, if the distribution is likely to be more than £25,000, it is necessary to use the MVL procedure as by doing so, the shareholders may have some tax savings.
A company can come to the end of its useful life for a variety of reasons, such as:-
- A shareholder may want to retire
- A shareholder may wish or take their investment (and its value) back out of the company
- There may have been changes in the market that make the company’s services redundant
- The company may have been incorporated to carry out a project, which is complete (SPV).
An Insolvency Practitioners’ services are necessary to facilitate an MVL and at Revive Business Recovery we have an expert in this area.
An MVL is a relatively straightforward liquidation (but with lots of paperwork). We have streamlined this procedure to make it easier and quicker to do and we ensure that you are fully informed and supported through this.
How does it work?
We will help the shareholders to close the company in an orderly manner and minimise the costs to professionals to ensure that they get the money back that they deserve.
Their return or investment would be classed as a capital distribution and may qualify for entrepreneur’s relief (up to £1m at 10% during the lifetime of the individual). If the shareholders receive a dividend whilst the company is trading, this would be classed as income and may be taxed at a higher rate in the majority of cases, and the shareholders will generally pay less tax if they qualify for the entrepreneur’s relief.
Briefly, the procedure comprises of
- Declaration of Solvency – A statement of assets and liabilities
- Appointment of a liquidator
- Realisation of assets
- Payment of tax and other creditors
- Distribution to shareholders
We recognise that shareholders will want to receive their money or other assets (such as a property) as soon as possible and we will distribute at the earliest opportunity. This could be as early as the date of the appointment.
For companies where they only have the cash at the bank left to deal with, the cost can be as little as £1,500 plus VAT and disbursements.
To talk to us about our services call us on 01302 965485 or fill in one of our forms and we’ll get back to you.