Brexit: cross border restructuring and insolvency update
If you own a solvent company and it has no further purpose, we can advise you how a Members’ Voluntary Liquidation (MVL) will provide you with an efficient and tax effective closure.
A company may reach a point where it has no further purpose, for example, due to retirement of the owners. If it has sufficient assets to pay all of its liabilities with interest within 12 months, then an MVL, or solvent liquidation, is a tax efficient means of closing the company and distributing its assets to its shareholders.
We will prepare all the necessary paperwork the directors require to convene a meeting of shareholders and prepare a sworn declaration of solvency (a statement of assets and liabilities). The company can be placed into an MVL with the approval of at least 75% of the shareholders who vote at the meeting. One of our licensed insolvency practitioners is appointed as liquidator at a shareholders’ meeting. Our liquidator then realises the assets, settles any liabilities, obtains all appropriate tax clearances and distributes the remaining assets to the shareholders.
An MVL may also allow a business to restructure under section 110 Insolvency Act 1986. We can provide specialist advice on how this can be particularly useful if shareholders wish to separate different parts of the company’s business and assets into different legal entities.
Corporate groups sometimes need to reorganise their structure, taking out redundant holding or other companies. Such group simplification exercises typically use MVLs and we are experienced in managing the process, liaising with the group and its advisers as necessary.
When considering liquidation, professional advice should be sought from us on the company’s financial position and any tax planning issues. We can provide you with advice tailored to your requirements, assist with placing the company into liquidation and have our licensed insolvency practitioner partners act as liquidators.
We provide practical, business focused advice to help you achieve your business objectives. Our team of experts are available at any one of our four office locations and have an extensive knowledge and experience across a wide range of sectors.
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