Fixed Price MVL Liquidation Options

Fixed Price MVL Liquidation Options. Written by: John A Waller, Consultant Updated: June 18th,2024.

Members Voluntary Liquidation MVL Products and Costs

Fixed Price Liquidation – MVL

If you have decided to close your business, which has operated as a limited company. You need experienced professional advice to manage the company and its affairs, especially regarding tax implications, so you can close your limited company tax-efficiently.

However, an MVL Liquidation requires that all matters related to the limited company be dealt with within 12 months of the liquidation meeting. Therefore, it remains essential that directors understand what happens when a company goes into liquidation and the liquidator’s costs to you.

Directors must understand the fee base of an MVL, especially when operating small businesses.

An MVL requires a licensed insolvency practitioner to act as a liquidator.

Before commencing an MVL Liquidation. Directors are required to sign a declaration of solvency for their company.

Fixed liquidation fees, however, do not apply to compulsory liquidation.

Benefits of a Members’ Voluntary Liquidation (MVL)

The Benefits of an MVL

An MVL can be a tax-efficient way of distributing the assets of a solvent company to the shareholders, allowing qualifying shareholders to benefit from business asset disposal relief (previously known as entrepreneurs’ relief) to maximise the value of their capital.

Unlike a CVL there is no Creditors Decision Procedure as creditors are to be paid in full.

– Shareholders benefit from Low tax rates;
– Swift access to shareholder funds;
– Ability to extract the value of the business into cash;
– Director’s exposure reduced;
– Reduction management time preparing statutory returns and compliance information;
– Tax-efficient return of leftover assets to shareholders;
– Enhanced transparency through simplifying complex systems and enhancing investor perception;
– Accounting and audit fee savings.

Fixed Price MVL Liquidation Options –  The MVL Process

Liquidate a company you no longer require

A member’s voluntary liquidation enables you to close formerly a solvent company (can pay its debts as and when due) and additionally-

  • Plan to retire;
  • No succession in place of your family business;
  • You no longer want to operate the business anymore.

So, to proceed, you must:

  • Sign a ‘Declaration of solvency’ if your company was incorporated in England and Wales.
  • If a Scottish incorporated company: ask the Accountant in Bankruptcy for form 4.25 (Scot).

Business Asset Disposal Relief was previously known as Entrepreneur’s Relief before 6 April 2020.

Business Asset Disposal Relief means you’ll pay tax at 10% on all gains on qualifying assets.

Affordable Fixed Fee MVL

Do they consider a fixed-price MVL? If so, when it comes to voluntary liquidation, we understand that our customers want to know how much it will cost to liquidate their company. Choosing the correct Insolvency Practitioner to perform an MVL remains important, however.

Liquidation service

HBG Advisory provides a SWIFT liquidation service, allowing payout with no hidden costs.

Therefore, gaining the confidence to move forward with a FIXED FEE puts costs aside and allows a stress-free liquidation process.

However, the cost of placing a company in liquidation can vary depending on your circumstances, but we have attempted to price a cost guide within set criteria. You can observe our packages below for a member’s voluntary liquidation MVL.

Fixed Price MVL Options – Commencing an MVL

Commencing a Members Voluntary Liquidation (MVL) enables company shareholders to appoint a Liquidator to close a limited solvent company while realising the company’s assets. Once the liquidator has fully realised all company assets while leaving no liabilities, the liquidator can distribute capital to shareholders in specie or from funds held in the company. It remains crucial that all creditor’s claims remain satisfied, leaving no outstanding creditors.

An MVL differs from a Creditors Voluntary Liquidation, as no creditors meeting occurs. However, directors must have a member meeting. A special resolution must be proposed in the meeting, requiring that three-quarters of the members vote in person or by proxy to place the company in an MVL.

Under certain circumstances, resolutions for private companies can be passed without a meeting if the resolution is signed by or on behalf of all members entitled to attend and vote at a general meeting.

A solvent limited company differs from an insolvent one. A limited solvent company has cash reserves and other assets that enable it to repay its creditors, leaving a balance for distribution to company shareholders.

The directors must initiate a member’s voluntary liquidations. However, 75% of shareholders must approve such action at a duly convened meeting.

Fixed Price MVL – Provide shareholders with a guarantee of cost

Small Company Fixed Price MVL Liquidation 1 – £1995 plus disbursements

  • Liquidators fees £1995;
  • Non-Advice Service;
  • Tax-Friendly – Business Asset Disposal Relief;
  • Quick access to 100% of funds on day one of the member’s voluntary liquidation;
  • Distribution in species;
  • Best MVL if the company has stopped trading, no assets or liabilities, only a cash balance.

Fixed Price MVL Liquidation 2 – £2,895 plus disbursements

  • Liquidators fees £2,895;
  • Advice-driven service;
  • Tax-Friendly – Business Asset Disposal Relief;
  • Quick access to 75% of funds on day one of the member’s voluntary liquidation;
  • Best MVL if S455 interest is due;
  • Best MVL if Corporation Tax is not finalised, assets on the balance sheet, and employees;
  • Suitable for contractors, consultants, or larger companies.

Fixed Price MVL Liquidation 3 – £4,850 plus disbursements

  • Liquidators fees £4,895;
  • Bespoke and advice-driven service;
  • Discussions with the company’s professional advisors;
  • Restructuring and realisation of going from a live business to a member’s voluntary liquidation;
  • Taking a commercial approach to asset realisation;
  • Dealing with creditors;
  • Contingent liabilities.

Disbursements

We are required to pay the following-

  • 4 separate notices in the Gazette (costing £60 + VAT each),
  • a bond, costing approx. A few hundred pounds.

When will funds be distributed among Shareholders?

The necessary liquidation will depend on the specific situation. With MVL1 and many MVL2, HBG Advisory will distribute funds within 48 to 72 hours. Funds remain distributed on day one of liquidation. We provide a Deed of Assignment/Distribution and the liquidator’s statement of Distribution, Receipts and Payments account.

However, not all MVLs remain easy to perform and require perhaps the MVL3 service. However, we can pay 75% on the day of the liquidation and the balance within three to twelve months after the liquidation date. Final payment is subject to clearance by HMRC, usually taking two months, but these unusual pandemic times may increase the time.

Once the MVL process is completed, the liquidator removes the company from the registrar at companies house.

Further MVL benefits provided by HBG Advisory

By redirecting the post to HBG Advisory, we assume all written pressure from HMRC and your company’s creditors, solicitors, bailiffs, and employees. Accordingly, HBG Advisory takes over the anxiety, freeing you of worry and stress and allowing you to move on.

The process involves changing your company’s registered office from Companies House to the HBG Advisory Swansea office. Therefore, any legal or Companies House documents served later do not trouble you. Instead, all documents are redirected to HBG Advisory, and we reply on the same day. 

The team at HBG Advisory monitors your company file monthly after sending the information pack to the creditors and then updates you by email. Our monthly update tells you the forecast time given by Companies House when they expect the liquidator to strike your company off and dissolve. 

Usually, after three to eight months of sending out the creditors pack, the company is struck from the register at Companies House. Then, it ceases to exist, and the dissolution process is complete. 

In the interim, you have not had to face a creditors’ meeting, and we have removed any postal and telephone pressure from you leading up to the company’s strike-off. 

You have addressed your statutory duty (through us) of informing your creditors of your financial position. As you have also reported the matter to the Registrar of Companies, you cannot later be personally fined by the Registrar for failing to deliver accounts and annual returns. 

Payment of MVL Fees

An MVL is not a formal liquidation like a CVL. The liquidator produces no “conduct report” on the directors, sent to the Directors Disqualification Unit, requiring no further investigation into the company’s affairs. 

If you instruct HBG Advisory, payment of our fees is simple, either by a personal:

  • Credit card,
  • cheque or
  • from the realisation of company assets.

HBG Advisory provides a fixed fee to remove any anxiety over fees down the line. 

Suppose you can’t afford to liquidate your company and seek a cheaper, more affordable alternative. If you want to avoid the costs of formally liquidating your company and instead want to use the cheapest alternative, please call us at 0330 056 3120 (in total confidence).

HBG Advisory offers company directors:

  • A secure, confidential, free telephone and
  • You can hold a Zoom video meeting to discuss whether your company is available as a cost-effective alternative to liquidation. 
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If you need help understanding the best way forward for your company, we can provide confidential free initial advice. You can book a free virtual meeting or call us on 0800 612 5448..
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