4 Stages for Simple Solvent Liquidation
If you’re planning to close a solvent company, a Members’ Voluntary Liquidation (MVL) offers a straightforward process with tax benefits and a fast turnaround.
At The Liquidation Centre, we’ve made it easy with our 4-stage liquidation process, designed to keep everything simple, straightforward, and moving forward quickly.
An MVL process that’s easy to understand
When it’s time to close your solvent company, we understand one of your main goals is to get your funds released quickly without any hassle. That’s why we’ve designed our 4-stage process to be as easy and straightforward as possible, so you’ll always understand what’s happening. We’ll also be here to guide you through each step and answer any questions you might have.
The 4 Stages of Solvent Liquidation
Stage 1: Engagement
We’ll begin the process by sending you an engagement letter to sign.
You’ll also receive an information pack about us, our services, and a clear breakdown of the solvent liquidation process so you know what to expect at each stage.
Stage 2: Required information
We want to start the MVL process as quickly as possible, but we need your company’s final accounts from your accountant before we can begin. The sooner we receive these, the sooner we can proceed.
We’ll also ask you to complete a questionnaire that needs input from your accountant. This gives us all the details we’ll need about your company’s accounts and financial situation to move ahead with the liquidation. This stage requires you or your accountant to submit all HMRC VAT, and other tax returns until your company ceased trading. Let us know once these are filed.
You should also work to settle any outstanding liabilities, including HMRC, before the next stage. At the start of the MVL process, remaining liabilities will incur a statutory interest rate of 8% per annum, calculated from the start of the liquidation to the date the debt is paid, so while we can get these settled during the liquidation, it will mean more money for shareholders if they are settled before the MVL begins.
Stage 3: Liquidation Documents
We’ll send over the paperwork to get the Board of Directors and the shareholders to agree to proceed with the MVL. You’ll need to sign a Declaration of Solvency (with a solicitor as witness) confirming that your company is solvent and can pay its debts.
So that the liquidator can pay a distribution to shareholders as soon as possible after the start of the MVL, we’ll set up an account for you to transfer the company’s funds.
Stage 4: The Liquidation Begins
Once we have all the documentation from Stage 3 and have performed final regulatory checks, we’ll confirm that the liquidation of your company is officially underway.
A quick recap of what we’ll do for the liquidation:
- We will guide you through officially winding up your company. Sometimes, this may involve instructing agents to handle asset valuations, sales, or preservation.
- Prepare all the shareholders’ meeting documents to start your company’s MVL.
- Once the MVL has begun, work with you to agree and settle any claims of your company’s creditors, including secured lenders or Crown departments.
- While we can’t offer tax or accounting advice (you’ll need to seek independent advice for this), we’ll work closely with your accountant to ensure that all final accounts and tax returns are filed before the liquidation process begins.
Are you ready to speak with one of our liquidation experts?
Call us at 0207 538 2222 or fill out our quick form today to get started.