What is a Creditors’ Voluntary Liquidation (CVL)?
What is the process of a Creditor’s Voluntary Liquidation (CVL)? A Creditors’ Voluntary Liquidation, abbreviated as CVL, is a formal insolvency procedure that concludes the affairs of an insolvent company. This process can only be initiated under the supervision of a licensed insolvency practitioner, who takes on the role of liquidator for the company throughout […]
Why the Spongebob Plan could actually cost you money?
What are the potential risks of dissolving a company with debts (Spongebob Plan)? Opting for the Spongebob Plan method to dissolve a company with debts may result in the loss of director redundancy pay, averaging around £9,000 per claim. Many directors can receive statutory redundancy pay if their company goes into liquidation or administration. But […]
Can you reuse a limited company name after liquidation?
What are the rules for reusing your company name post-liquidation? After liquidating your limited company, you’re unable to use the same name or similar ones for up to five years after liquidation, unless you acquire the business during insolvency proceedings, obtain court approval, or if the liquidated company was part of a group. Failing to […]
Can I sell business assets before the company goes into liquidation?
Disposing of company assets before entering liquidation In theory, selling business assets before your company enters liquidation is possible, but the Insolvency Act outlines strict conditions for doing so. Failure to comply with these requirements can result in allegations of misconduct or fraud, with severe penalties, even if there was no deliberate attempt to deceive. […]
How to Cease Trading a Limited Company
What is the easiest way for a limited company to cease trading? Ceasing to trade a limited company might seem straightforward, but the process can be more intricate than expected. Surprisingly, forming a limited company is easier than winding one up. This complexity arises from the various rules and regulations governing the winding-up process, whether […]
Members’ Voluntary Liquidation: How long does the process take?
What is the process for an MVL? In a Members’ Voluntary Liquidation, the winding up of a solvent company is overseen entirely by a licensed insolvency practitioner. Their responsibilities include identifying company assets, settling any outstanding debts to creditors, and distributing the remaining funds among shareholders. Subsequently, the company is dissolved at Companies House, marking […]
Members’ Voluntary Liquidation Tax: A Director’s Guide
What are the tax implications of an MVL? A Members’ Voluntary Liquidation (MVL) is a tax-efficient method for winding up a solvent company with considerable assets to share among shareholders. The money you receive is taxed as capital rather than income. Depending on your situation, you might also qualify for Business Asset Disposal Relief (previously […]
Members’ Voluntary Liquidation: Declaration of Solvency
What is a declaration of solvency? A declaration of solvency is a crucial legal document that requires the majority of the company’s directors to sign before initiating a Members’ Voluntary Liquidation. This declaration confirms that the company is financially stable, capable of settling all outstanding debts (including statutory interest) to creditors within 12 months from […]
Members’ Voluntary Liquidation: Understanding a Signed Indemnity
What is an MVL signed indemnity? A signed indemnity permits the distribution of company funds to shareholders before the MVL process concludes officially. This ensures shareholders need not wait for months while the MVL progresses through the necessary channels to access the funds held by the company. However, if a legitimate creditor emerges after distributions […]
How much does a Members’ Voluntary Liquidation cost?
How much does an MVL cost? Approximately £4,000 is a rough estimate for the expense of a Members’ Voluntary Liquidation (MVL) handled by a licensed insolvency practitioner. Besides the practitioner’s fee, this amount encompasses additional charges called ‘disbursements’, covering Gazette fees, search fees, and a bond. Together, these constitute the overall cost of the MVL. […]