Solvent / Restructuring
I always strive to maximise the return to stakeholders
Whether a company is solvent or insolvent, I always seek to maximise the return to anyone who should have money paid to them. This could be creditors or shareholders. There are various ways to do this, and here I concentrate on solvent companies:
Companies within a Group (or trading divisions within a company) can reach the end of their lives, or have remained dormant for a number of years and are taking up time and cost to administer them. A Liquidator may be able to utilise unused tax losses to benefit the Group, or simply provide assistance in putting them to bed properly. The structure of a Group may also need reorganising to reduce the risk between businesses, or to make it more efficient.
I can advise on the best way to do this using formal or informal processes, or a mixture of both.
Your company may have paid everyone in full and has come to the end of its life and simply needs striking off from the Register of Companies.
The process if pretty simple and involves filing a form with the Registrar of Companies and three months later it is dissolved and ceases to exist! The process is particularly useful for finalising the affairs of dormant companies.
However, there are some downsides, including the potential for a large fine if it’s not done properly! Please call me to discuss this if you think this process could be useful to you.
members voluntary liquidation
Your company may be solvent, i.e. it can pay all its liabilities in full, and needs closing down in the best possible way. By closing the company, cash and assets can be extracted in the most efficient way for the shareholders. Distribution of cash (and unsold assets) by a Liquidator will also often result huge tax savings in respect of an individual shareholder’s own tax liabilities.
An MVL is particularly useful:
- if the amount of capital to be distributed is greater than £25,000: there is no risk that capital distributions can be clawed back from shareholders;
- a significant value of assets or cash is being distributed to shareholders – distribution by a Liquidator allows for additional tax planning to minimise personal tax liabilities for the shareholders;
- liabilities are finalised to the extent that all claims against the company are dealt with in one go; and
- the company cannot be restored to the Register of Companies if more than two years have elapsed since its dissolution (except in rare circumstances for fraud or other criminal related matters).
There are quite a few hoops to go through to make sure the MVL process is applied properly. Please give me a call if you would like to discuss this further!