What is a Members’ Voluntary Liquidation?

Members’ Voluntary Liquidation (MVL) is a procedure that is used when a company has fulfilled its purpose, has sufficient assets to meet all of its liabilities, trading has stopped and the company’s shareholders wish to realise their investment in a tax efficient way.

The key tax benefit of an MVL arises from the fact that a distribution of assets to shareholders via MVL are treated as capital rather than income distributions. Tax paid by shareholders on capital distributions will be based upon capital gains tax rather than income tax rates, which subject to the circumstances, can give rise to a substantial tax saving.

The Process

The following diagram provides an overview of the key steps involved in placing a company into MVL and the subsequent duties of the liquidator.

If you have any questions, please do not hesitate to contact a member of our team on 020 8662 6070 or by email at mvl@babr.co.uk.

Timing of distribution to shareholders

Assuming no creditor claims or HMRC objections are received, shareholder s will receive a first distribution of cash assets (less £10,000) within 6-7 weeks of commencement of liquidation.

Non-cash assets and the retained £10,000 are thereafter distributed to shareholders just prior to conclusion of the liquidation, typically within 5 to 7 months of commencement of the liquidation, provided no creditor claims are received in the interim.

Other professional advice

Advice in relation to cessation of trading, accounting, and tax (corporate and personal) should be provided by the company’s accountant. Fees associated with these activities and any other assistance provided should be agreed between the accountant and directors/shareholders independently.

Why use us?

Bailey Ahmad is an independent firm which specialises in providing corporate and personal rescue, recovery and insolvency solutions to those in financial ddifficulty.

We also assist shareholders of solvent companies with extracting surplus funds in a structured and tax efficient way via solvent MVLs.

We are licensed and regulated by Institute of Chartered Accountants in England and Wales and a firm member of R3, The Association of Business Recovery Professionals. This ensures that we maintain the highest ethical and professional standards in the solutions we deliver for our clients

Testimonials

I would like to thank everyone at BABR for the quality service received during what were challenging times for us as a business. I found them to be friendly and responsive to our needs, always clear in their instruction and worked to make the entire process as simple and painless as possible. I would recommend BABR to anyone needing their expertise and support in what can be the most challenging time you can face as a business.

I decided to retire from consultancy & to liquidate my sole trader company. My accountants recommended Bailey Ahmad. The advice & support was excellent throughout not least from Sarah Broom who led the process. The explanations of the technical processes were clear & accessible, the advice was first rate, & the communications were excellent. This was all immensely reassuring. It has been a protracted process entirely due to unacceptable delays at HMRC but Sarah has chased them with energy and persistence keeping me briefed on her efforts. I can’t commend them too highly- extremely competent & wholly professional while being warm and friendly to deal with.

The loss of a business through insolvency is devasting to those involved. Building up a business from scratch, putting your heart and soul into making it a success and having high hopes for the future, perhaps passing the business on to a younger generation, can be snatched away, normally by circumstances totally outside of the business owner’s control. The loss of a business is personal. It is therefore so important that any liquidation is handled with this in mind and that business owners going through such a traumatic event feel supported and are treated compassionately. The team at Bailey Ahmad Limited (BABR) tick all boxes. They are professional, compassionate, understanding and supportive. Of course, liquidation is a serious matter and there are formalities to complete, but if a business owner feels supported and not made to feel a total failure, the process does not feel so daunting. I cannot recommend BABR highly enough.

Our client manager Sarah made the whole process simple and transparent. Her explanations of the complexities surrounding affairs were clear and easy to understand. The communication throughout has been great, always keeping me updated and in the loop. I would highly recommend Bailey Ahmed, extremely professional whilst being open and friendly through this process.

Excellent service from BABR in executing our recent voluntary liquidation. Smooth process with clear instructions and great communication throughout. Special mention must go to Sarah Broom who was so professional, friendly and easy to work with. Met with us at the start of the process, guided us through and was simply exceptional.

"This was an excellent service from start to finish. My client manager was proactive, communicated regularly, and worked brilliantly with my accountant as well as providing a legal representative recommendation. This made the whole process easy and stress-free for me. I would highly recommend!"

A seamless and well-communicated experience using BABR for our recent voluntary liquidation. Initially considered not utilizing business asset disposal tax relief as thought it was going to be a long and tiresome process. However, the initial distribution took less than four months in the end. Would highly recommend this firm and can't thank Sarah Broom enough for her time, knowledge and friendly approach in guiding us through the process.

I was first introduced to BABR some 3 years ago when attempting to wind up two companies in my father's estate. Sarah Broom, their client manager, has been so supportive throughout what was personally a negative experience. Polite, extremely helpful and knowledgeable and an absolute joy to encounter as I felt safe as at all times that the technical side of the process would be handled with care and expertise. I could not recommend them highly enough.

When I retired in 2023, my accountant recommended a Members Voluntary Liquidation (MVL) of my 10-year old business as the most cost-effective way to wind up the company. The first meeting I had with Paul Bailey, one of the directors, immediately established a relationship of trust. His explanation of the process instilled me with confidence in their business. The BABR staff managed the liquidation process in an excellent manner and they clearly communicated the process every step of the way. Sarah Broom is highly competent and managed the whole process extremely well. She was assisted by Molly Dunn and between the two I was always kept in the loop about the progress. They are very knowledgeable about their field of expertise. They provided me with an accurate quotation of the costs from the outset and the liquidation process was completed within 3 months. I can highly recommend the services of BABR.

Paul Bailey FABRP, Tom Ahmad FABRP ACA, Matt Reeds MABRP and Kirren Keegan MABRP are licensed to act as Insolvency Practitioners in the UK by the Institute of Chartered Accountants in England & Wales