A Clear, Orderly Conclusion
For directors choosing to wind down a solvent company. We manage the entire process from start to finish—ensuring legal requirements are met, creditors are paid, and remaining assets are properly distributed to shareholders.
Considering Closing Your Company?
Company liquidation is a significant decision that requires professional guidance. Whether you're closing a solvent company or dealing with insolvency, MHC & CO provides expert liquidation services that ensure compliance, protect directors, and achieve the best possible outcome.
Types of Company Liquidation
Different situations require different liquidation procedures:
Members' Voluntary Liquidation (MVL)
Solvent Companies
The company can pay all its debts. Directors declare solvency and distribute assets to shareholders.
Creditors' Voluntary Liquidation (CVL)
Insolvent Companies
The company cannot pay its debts. Directors voluntarily place the company into liquidation.
Compulsory Liquidation
Court Ordered
Forced liquidation by court order, usually initiated by creditors. Least desirable option.
⚠️ Important: Continuing to trade while insolvent can lead to director disqualification and personal liability. Seek professional advice immediately if you suspect insolvency.
MVL vs CVL: Key Differences
| Aspect | Members' Voluntary Liquidation (MVL) | Creditors' Voluntary Liquidation (CVL) |
|---|---|---|
| Company Status | Solvent (can pay all debts) | Insolvent (cannot pay debts) |
| Directors' Declaration | Declaration of solvency required | No solvency declaration |
| Tax Treatment | Capital gains tax rates (10-20%) | Income tax rates (20-45%) |
| Timeframe | 3-6 months typically | 6-12 months typically |
| Director Liability | No personal liability | Possible investigation of conduct |
| Best For | Retirement, business sale, restructuring | Insolvent businesses needing closure |
Benefits of Professional Liquidation Services
Director Protection
Proper liquidation protects directors from personal liability and potential disqualification.
Tax Efficiency
MVL allows extraction of company funds at capital gains tax rates (10%) instead of dividend tax rates (up to 38.1%).
Legal Compliance
Ensures all statutory requirements are met, avoiding penalties and legal issues.
Clean Break
Properly dissolved companies cannot be resurrected by creditors, providing finality.
💡 An MVL can save up to £28,100 in tax on every £100,000 distributed compared to taking dividends.
Our Liquidation Process
Structured approach ensuring compliance and optimal outcomes:
1. Initial Assessment
We review your company's financial position and recommend the appropriate liquidation route.
2. Documentation Preparation
Preparation of all required documents, including director declarations and shareholder resolutions.
3. Liquidator Appointment
We act as your licensed insolvency practitioner or appoint an independent liquidator if required.
4. Asset Realization
Collection and sale of company assets, settlement of creditor claims (in order of priority).
5. Distribution & Closure
Distribution of remaining funds to shareholders and final dissolution at Companies House.
Director Responsibilities & Protections
Director Duties During Insolvency
Cease Trading
Stop incurring new debts once insolvency is identified.
Preserve Assets
Protect company assets for creditors' benefit.
Creditor Equality
Avoid preferring some creditors over others.
Breaching these duties can lead to director disqualification (2-15 years) and personal liability.
Wrongful Trading
Continuing to trade when you knew or should have known the company couldn't avoid insolvency.
Fraudulent Trading
Carrying on business with intent to defraud creditors. This is a criminal offence.
Preference Payments
Paying some creditors in preference to others shortly before liquidation.
Alternatives to Liquidation
Liquidation isn't always the only option. We can advise on alternatives:
Company Strike Off (DS01)
Simpler, cheaper alternative for dormant companies with no assets or liabilities.
Administration
Temporary protection from creditors while restructuring or selling the business.
Company Voluntary Arrangement (CVA)
Agreement with creditors to pay back debts over time while continuing to trade.
Pre-Pack Administration
Quick sale of business assets before appointing administrators.
Our Liquidation Services
⚠️ Facing Insolvency?
Time is critical when dealing with insolvency. Every day of wrongful trading increases director liability. Get professional advice immediately to protect yourself.
Urgent Insolvency Advice NeededProfessional Liquidation for a Clean Exit
Whether closing a successful business or dealing with financial difficulties, professional liquidation ensures legal compliance, protects directors, and achieves the best possible outcome for all stakeholders.
Ready to Streamline Your Accounts?
Contact MHC & CO today and let our experts handle your Accounts.
MHC & Co.
Chartered Accountants
54 Gloucester Road
North,
Bristol
BS7 0SJ
Contact Us
Tel: +44 333 789 1010
Fax: +44 117 3737 449
Email: info@mhcandco.co.uk
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