MVL - FAQ's
What is Members Voluntary Liquidation?
Members Voluntary Liquidation is the solvent liquidation of a business. If this option is appropriate, your company must have sufficient assets to settle its debts within 12 months.
An MVL may be used for purposes of reorganisation or in the case of owner-managed businesses, to enable the shareholders to release their interest in the company.
How Long Does it Take to Initiate an MVL?
The bronze service MVL is our quick turnaround MVL. If your company accounts are finalised, all CT and VAT liabilities are paid and your accounts show a cash at bank only figure (no assets and no liabilities) then your company will fit into our Bronze Service.
We are able to quickly turnaround a Bronze MVL, sometimes from instruction to liquidation within 24 - 48 hours. But you must meet the cash at bank only criteria.
This can also give you access to your company money quickly, as you have access to your company money prior to holding the meetings to place the company into Members Voluntary Liquidation.
To begin the process, call us on 020 8915 1012 and we can start the same day (subject to qualifying criteria).
We will of course have to undertake our statutory compliance reviews but are able to react swiftly depending on your requirements to prepare the necessary meetings paperwork and the Declaration of Solvency to place your company into Members Voluntary Liquidation.
How Long Until Funds are Distributed Among Shareholders?
With our Bronze Service MVL, and with the majority of our Silver Service clients, funds can be distributed within 24-48 hours. We distribute funds on day one of liquidation and provide you with the necessary Deed of Assignment/Distribution and the Liquidator's Distribution Statement and Receipts and Payments account. We do not ask you to transfer company money into our client account.
With more complex company structures, where your accountant recommends to use our Silver of Gold service, usually the shareholders of the company should receive about 75% of the funds extracted from the company on day one of liquidation, and within 3 months to 12 months of entering into an MVL, shareholders should receive the remaining balance of the liquidation account. As soon as HMRC (HM Revenue & Customs) clears the case, which usually takes approximately 2 months.
There is not a specific time line which applies to all companies as there are many variables which have to be considered. But with a Bronze Service it is day one of liquidation, a Silver Service can either be day one of liquidation for 75% of funds or up to three months to one year.
Why are Frost Group MVL'S cheaper than the MVL provider my accountant referred me to ?
It may be that your accountant has a 'special' relationship with a chosen Insolvency Practitioner and they may have worked together for many years. In our experience there are many excellent regulated Insolvency Practitioners who provide MVL's at reasonable and competitive prices, but there are also those who are charging extortionate fees for what can be a very simple process.
Can you remember many years ago when there was an outcry from Opticians when they had to give their customers a copy of their prescription for their glasses, the Opticians lost their previous loyal customers who now had the opportunity to shop around for more competitive priced glasses. If you are closing your company you are in the same situation, you do not have to use the Insolvency Practitioner recommended by your Accountant, and you can definitely shop around for the best priced MVL.
We hear daily of clients who have been quoted in excess of £3,000 for incredibly simple MVL's, it is your choice to pay such a price if you wish, but if you want to keep more of your hard earned money, please call us and discuss your requirements, time frame and expectations.
When Does a Members Voluntary Liquidation End?
The end of the procedure is marked by the Members Voluntary Liquidation final meeting held by the liquidator. The liquidator will send a notice of the final meeting to the London Gazette, and about three months later the company will be struck off the Registrar. However, the directors of the company may be able to restore the company via court order at any point within 6 years of dissolution.