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.

 

What expenses and charges come with Members’ Voluntary Liquidation?

Members’ Voluntary Liquidation (MVL) offers an efficient means to wind up a company, converting its assets into cash for distribution among shareholders. A company can only undergo an MVL if its directors affirm a Declaration of Solvency. This document confirms that the company’s assets and liabilities have been assessed, and the directors believe the company can settle all existing and potential debts (including statutory interest) within a year.

The primary advantage of an MVL is that it enables shareholders to receive the business’s value in cash, in a manner that’s cost-effective and tax-efficient. Funds distributed through the MVL process are taxed as Capital Gains rather than income, resulting in substantial tax savings compared to extracting the business’s value through dividends outside of liquidation.

 

i. Cost of Disbursements – Gazette Notices, Search Fee, and Bond

In addition to the liquidator’s fee, the primary fees associated with Members’ Voluntary Liquidation are the disbursements. These cover various Gazette notices, a search fee, and a bond with a premium that fluctuates based on the company’s asset value.

 

ii. Liquidator Fees and Overall Cost of Members’ Voluntary Liquidation

The expense of an MVL can vary based on several factors, such as whether the company is structured as a ‘cash shell’, the value of its assets, and the chosen liquidator overseeing the process. Generally, an MVL entails approximately £4,000 in liquidator fees and associated disbursements.

The liquidator levies fees for tasks like drafting and submitting necessary forms and overseeing the procedure. If the company is solvent, these fees should be relatively modest compared to the sum distributed to shareholders.

Additionally, the liquidator manages tasks like filing accounts and handling technicalities. As a company director during the MVL, your involvement is typically minimal, mainly involving cooperation with the appointed insolvency practitioner and supplying requested information.

If you’re considering starting a Members’ Voluntary Liquidation or have queries about its costs, please don’t hesitate to email us or give us a call for free and confidential guidance. With over 100 offices nationwide, expert advice is always within reach.

 

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Senior Partner at Vanguard Insolvency Practitioners | Website | + posts

I am an insolvency professional with a distinguished career specialising in commercial insolvency, adeptly navigating Creditors Voluntary Liquidation, Company Voluntary Arrangements, and Company Administrations. With a comprehensive understanding of insolvency laws and an unwavering commitment to ethical practices.