A Member’s Voluntary Liquidation (MVL) is typically proposed by the director(s) when the business has ceased to trade, and the company is no longer required. It is a tax-efficient way of distributing company assets amongst shareholders, allowing shareholders to claim Entrepreneur’s Relief should they meet the relevant criteria. It is a formal procedure governed by the Insolvency Act 1986 and must be carried out by a licensed insolvency practitioner. Our standard MVL cost is £795 + VAT and disbursements, however, this can rise depending on the nature and complexity of the procedure.
There are certain duties which must be undertaken by the liquidator, such as the drafting and submission of statutory paperwork to Companies House, the calculation and distribution of company funds to shareholders, and liaising with HM Revenue & Customs to obtain clearance for the liquidation to be completed and the company dissolved.
What are the costs
Our standard cost of an MVL, is a fixed fee of £795 + VAT + disbursements. This standard fee applies to cases where the company’s only asset is cash at bank, and all liabilities have been settled. If the case is more complex and there is a need for physical assets to be realised, outstanding liabilities to be paid or assets to be distributed in specie, then our fees will be higher.
The costs and expenses of the liquidation are approved by the shareholders, and are usually drawn directly from the company assets held in the liquidation i.e. the cash at bank. The balance is then distributed in accordance with the company’s shareholding. As such we do not usually require payment upfront for an MVL.
The table below details our pricing structure and provides a breakdown of the items covered in each price bracket. Every company is different, and we can offer a bespoke package if required.
|£795 MVL||£1,695 MVL||Bespoke MVL|
|All work done by phone/email/post||✓||✓||✓|
|Tax efficient distribution to shareholders||✓||✓||✓|
|Dedicated case worker||✓||✓||✓|
|Suitable for companies who…|
|Have outstanding liabilities||✓||✓|
|Assets distributed in specie Directors Loans Stocks, shares & investments Title to assets (excl property)||✓||✓|
|Distribution in specie to title of property||✓|
|Physical assets to be realised||✓|
|HMRC investigations & disputed creditor claims||✓|
|Restructuring MVL (Section 110)||✓|
*If required we offer a face to face consultation with our bespoke MVL package.
As per the above table, our cost of an MVL has a pricing structure which is based on a three-tiered system designed to suit the individual requirements of each company.
£795 MVL + VAT & disbursements
This is for a straight-forward MVL where the company has no outstanding liabilities, and all assets have been turned into cash.
£1,695 MVL + VAT & disbursements
If the liquidation of your company is more complex and there are outstanding liabilities to be settled, or assets to be distributed in specie; our £1,695 MVL option would be the most appropriate.
Bespoke + VAT & disbursements
With our bespoke MVL we will carry out the valuation and sale of any physical assets, and deal with any disputed creditor claims against your company. We also offer a free face-to-face meeting with one of our consultants, as well as providing constant support and guidance throughout the process.
There are several statutory disbursements incurred as part of the liquidation process. These are part of the cost of an MVL and are as follows:
|Distribution in Specie.”>London Gazette Advertisements (3 adverts with a cost of £76.20 plus VAT each)||£228.60 + VAT|
|Document Management Fee||£8.43 per year (approximately)|
|Bank Transfer Fee||£15 per bank transfer for each shareholder’s distribution|
|Storage of Books & Records. Records must be held for the lifetime of the case and for 12 months following dissolution.||£80 per box per year.|
|Mileage Charge for Collecting Company Books and Records||89p per mile|
|Liquidator’s Insurance Bond – based on asset value|
|Between £25,000 to £50,000||£74|
|Between £50,000 to £100,000||£110|
|Between £100,000 to £250,000||£168|
|Between £250,000 to £500,000||£256|
|Between £500,000 to £1,000,000||£336|
|Between £1,000,000 to £2,000,000||£650|
|Between £2,000,000 to £3,500,000||£800|
|(the cost of this is based on the value of assets that the company has)|
The cost of an MVL starts
at a fixed fee of £795 + VAT and disbursements for a standard MVL. If all creditors have been paid and there is only cash at bank left to distribute, the liquidation process should run smoothly and hence there should be less work involved. If there are other assets to realise or creditors to pay, this involves more work and hence our fixed fee will increase to £1,695 + VAT. In the case of more complex MVL’s we offer a bespoke package to meet the individual needs of the company.
The provisions of Entrepreneur’s Relief mean that an MVL is a tax-efficient way for shareholders to withdraw their funds from the company, rather than by taking it out as a dividend. The distribution of company assets through an MVL allows shareholders to claim Entrepreneur’s Relief should they be eligible. An MVL is a formal procedure governed by the Insolvency Act 1986 and must be carried out by a licensed insolvency practitioner.
How we can help
If you have a solvent company which you believe has come to the end of its natural life span and you want to extract the assets from the company in a tax-efficient manner, it’s important to know the options available to you.
We can offer you a fixed fee service, with no hidden costs. All work is carried out by one of our licensed insolvency practitioners, assisted by a dedicated caseworker who will guide you through the liquidation process.