What is it?
Otherwise known as a Members’ Voluntary Liquidation (MVL), a solvent liquidation is the winding up of a company that has sufficient assets to pay its debts in full within 12 months, but may have outgrown its usefulness. The process is often used as a part of the restructuring of a group of companies, for example.
What will happen?
The procedure is usually fairly straightforward. Directors of the company swear a Statutory Declaration of Solvency and convene a meeting of the company’s shareholders in order to pass a winding up resolution. They also appoint a liquidator who realises the company’s assets, pays off all creditors together with statutory interest and returns any surplus to the shareholders.
This process is usually tax neutral and is a safer and more efficient way of dissolving a company than simply having it struck off from the company’s register at Companies House. This is because it draws a line under all liabilities without any recourse to the directors and shareholders should further liabilities arise at a later date.
How White Maund can help
We can help you make vital decisions, such as whether it’s more beneficial to make the company dormant, rather than fully dissolved, and how best to handle retained profits. We are also able to guide you through all your legal and tax responsibilities. Call us now for a free consultation.
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