Members' Voluntary Liquidation
What is a Members' Voluntary Liquidation (MVL) and what does the process involve?
What is an MVL?
A Members’ Voluntary Liquidation (MVL) is a formal process for closing down a solvent company in a cost-effective way. MVLs are often utilised as an exit planning tool when a profitable company has reached the end of its useful life, where shareholders are keen to extract the profits of their investment, or if its directors are approaching retirement or otherwise looking to depart from the business for any other reason.
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What is an MVL?
A Members’ Voluntary Liquidation (MVL) is a formal process for closing down a solvent company in a cost-effective way. MVLs are often utilised as an exit planning tool when a profitable company has reached the end of its useful life, where shareholders are keen to extract the profits of their investment, or if its directors are approaching retirement or otherwise looking to depart from the business for any other reason.
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Staff Payment & Furlough Concerns
n response to the coronavirus pandemic, the government introduced a range of initiatives to help businesses weather the storm and cushion the economic shock. One of the most successful and widely used measures has been the Coronavirus Job Retention Scheme (CJRS) which has been used in some form or other by two thirds of businesses since it was introduced in March 2020.
A series of extensions means this scheme will now run until the end of March 2021.
As part of the scheme, employers who have been hit by a drop in trade due to coronavirus related business interruption, can furlough those staff who for whom there is not adequate work. The government will cover 80% of their salary up to a monthly cap of £2,500. Employers can choose to top this up to 100% if they wish.
A series of extensions means this scheme will now run until the end of March 2021.
As part of the scheme, employers who have been hit by a drop in trade due to coronavirus related business interruption, can furlough those staff who for whom there is not adequate work. The government will cover 80% of their salary up to a monthly cap of £2,500. Employers can choose to top this up to 100% if they wish.
Director Liability for Company Debts
Can Directors Be Held Liable For Company Debts in a Limited Company?
When a limited company is insolvent, the business is bankrupt and therefore unable to repay debt due to a shortage of cash.
When setting up your business you have two main ways in which you can choose to operate; you can take on work as a sole trader, or alternatively you can incorporate as a private limited company. Both structures have their own pros and cons, however, the main benefit of operating as a limited company is that your business will be seen as its own separate legal entity, something which can be vital should the company run into financial difficulties further down the line.
When a limited company is insolvent, the business is bankrupt and therefore unable to repay debt due to a shortage of cash.
When setting up your business you have two main ways in which you can choose to operate; you can take on work as a sole trader, or alternatively you can incorporate as a private limited company. Both structures have their own pros and cons, however, the main benefit of operating as a limited company is that your business will be seen as its own separate legal entity, something which can be vital should the company run into financial difficulties further down the line.
Can My Company be Rescued?
When you seek assistance from a licensed insolvency practitioner, their first objective will be to rescue your business and return it to profitability. This can be effected in a number of ways, depending on your company’s individual circumstances and the level of debt owed.
You may have heard the terms ‘business rescue’ and ‘business recovery’ - the processes associated with these terms include sourcing new funding, restructuring a company’s affairs including assets and debts, and entering formal insolvency solutions such as a Company Voluntary Arrangement or company administration.
Once you have recognised that a problem exists and that the company is in danger of entering insolvency, you should seek assistance from a licensed insolvency practitioner (IP). They will be able to assess your situation, and guide you towards the best options.
You may have heard the terms ‘business rescue’ and ‘business recovery’ - the processes associated with these terms include sourcing new funding, restructuring a company’s affairs including assets and debts, and entering formal insolvency solutions such as a Company Voluntary Arrangement or company administration.
Once you have recognised that a problem exists and that the company is in danger of entering insolvency, you should seek assistance from a licensed insolvency practitioner (IP). They will be able to assess your situation, and guide you towards the best options.
Real Business Rescue
Head Office 340, Deansgate, Manchester, M3 4LY, United Kingdom
Real Business Rescue specialise in a wide variety of services including company debts, liquidation and closure, restructuring and rescue and specialist business advisory for a wide variety of industries and sectors throughout the UK. We cater for businesses and organisations that require assistance with their insolvency issues during COVID-19 and can offer expert advice across a broad range of professional services.