Business Insolvency
Retirement Options
Insolvency isn’t always about bad news. You may be considering retiring from business and are looking for an orderly winding up of your company, with a tax efficient distribution of capital assets to you and your fellow shareholders. In that case, you may want to consider a Members’ (that is, shareholders) Voluntary Liquidation.
Members’ Voluntary Liquidation - MVL
A solvent liquidation is known as a Members’ Voluntary Liquidation, in which a liquidator is appointed by the shareholders and the company’s assets are sufficient to settle all its debts with twelve months. Members’ Voluntary Liquidations may be used for purposes of reorganisation, or in the case of owner managed businesses, to enable the shareholders to realise their interest in the company. The liquidator ensures that all liabilities have been paid and distributes everything else to the shareholders as a dividend. If appropriate, the company’s assets can be distributed to its shareholders as a ‘distribution in specie’ - which can be useful for a property company, for example.
A word of caution. Members’ Voluntary Liquidations can have serious tax implications for shareholders. We can advise you on a strategy to minimise your Capital Gains Tax liability as part of the Liquidation process.