Solvent Solutions

Our restructuring specialists work with a breadth of companies to review the solvent solutions open to them. We review company structures, manage complex corporate simplification projects and advise on a variety of solvent exit strategies, where shareholders are seeking to receive assets and profits in a tax efficient manner.

Our approach

Corporate Simplification

Acquisitive companies often find that over time their structures become unduly complicated and inefficient, with numerous legacy dormant subsidiaries within a group. This results in increasing compliance and administrative costs, can waste management time and increase risk.

We can help in the formal closure of solvent companies, through managed wind-downs, solvent liquidations and strike offs. We work with you to identify target companies within the group that are considered surplus to requirements, checking that they are suitable for removal, identifying any barriers to removal and providing recommendations on next steps. We can strike off (dissolve) or place into solvent liquidation these surplus companies, leaving a leaner, more efficient corporate structure.

Members' Voluntary Liquidation (MVL)

Shareholders can extract their wealth from a solvent company, often in a tax-efficient way, using a solvent liquidation process.

We work with directors and shareholders of a company to place it into solvent liquidation and liaise closely with the company's accountants and tax advisers to ensure any available tax reliefs are claimed. As liquidators, we realise the assets of the company and distribute these to shareholders, after settling any outstanding debts owed by the company.

Corporate Simplification Frequently Asked Questions (FAQs) – what you need to know

What is Corporate Simplification?

Corporate Simplification is a rationalisation process to reduce the number of companies in a large corporate group structure reducing the financial and administrative burden.

Many groups build up a large number of subsidiaries over time which can then come to the end of their useful life.

Once companies are targeted we can advise whether a company should enter Members’ Voluntary Liquidation or whether it can go through a strike off procedure.

What are the benefits of undertaking a project like this?

There are many benefits including direct savings in terms of tax, administration, holding, accounting and audit costs.

No further management time would be spent on the companies once they have entered Members’ Voluntary Liquidation or have been struck off.

What are the benefits of a Members’ Voluntary Liquidation as opposed to a strike off?

We would always recommend a Members’ Voluntary Liquidation is undertaken where the company's full trading history is not known. For example where the companies have been acquired into the group.

This is because a Members’ Voluntary Liquidation brings a formal closure to the company as creditors are given a deadline to come forward with any claims.

The directors are therefore better protected as they have undertaken a formal process which allows creditors to claim. This is not undertaken in a Strike Off.

Can you assist with the tax and accounting steps of the Corporation Simplification Project?

Yes, we can work with our tax and accounting teams to bring you a joined up approach to assist you with all the necessary steps in getting the companies ready to be placed into Members’ Voluntary Liquidation.

What is your experience and how can I get in touch?

We have over 100 years of experience within the team in respect of corporate simplification work. We undertake corporate simplification work for FTSE100 household names to small privately owned groups of just 2 or 3 companies. Whether there are 100 or more companies within your group, or just 2 or 3, we can help. We can guide you through the process from the time you start thinking about removing the companies through to liquidation and ultimately through to dissolution and removal from Companies House.

If you’re thinking of removing any subsidiaries from your group, please don’t hesitate to contact us for a free no obligation initial chat.

Members’ Voluntary Liquidations Frequently Asked Questions (FAQs) – what you need to know

What is a Members’ Voluntary Liquidation (MVL)?

A Members’ Voluntary Liquidation also known as an MVL, is a process available to solvent companies to extract assets and close the company in a risk-averse and tax-efficient manner.

Is an MVL right for you?

If your company is solvent, an MVL could be right for you. We assist owner managed businesses with assets ranging from nil to as high as £10 million plus.

If you’re unsure if an MVL is the correct decision for you and your business, please do not hesitate to contact us and we’ll be happy to talk your options through with you.

What are the benefits of an MVL as opposed to a strike off?

There are two options to dissolve a company in the UK an MVL or strike off.

An MVL is generally more tax-efficient for the shareholders. It is also a more risk averse approach as a due diligence process is undertaken prior to the company entering MVL to ensure all matters have been dealt with.

How do I prepare for an MVL?

Steps should be taken to organise your company’s affairs. We would suggest assets are realised and liabilities paid prior to the company entering MVL. All obligations to HM Revenue & Customs should be up to date including all returns submitted and any liabilities paid.

We have a specialist checklist for you to complete to ensure that matters are dealt with prior to the company entering MVL.

Please, therefore, contact us during the planning stage as we take a hands-on approach and will be with you from the very beginning of the process, advising you on any steps that you will need to take to get your company ready to enter MVL.

What is the members' voluntary liquidation process?

Once the company is ready to enter MVL, the directors will be required to swear a Declaration of Solvency during a Board Meeting. This confirms that the company is solvent and will be able to pay any liabilities within 12 months. The directors then issue resolutions to the members usually during the same Board Meeting. When the resolutions have passed, the company will enter MVL.

Following their appointment, the Liquidators will make the required filings with Companies House and give notice to creditors to submit any claims in the London Gazette. Once the notice to creditors has expired, the Liquidators will declare a dividend to creditors (if applicable). During this time, the Liquidators will realise the company’s assets (if applicable).

Assuming, the company’s tax position with HM Revenue & Customs is finalised prior to the company entering MVL, the Liquidators would then declare a final distribution to the members and close the MVL.

How much does an MVL cost?

The costs of an MVL are highly dependent on the position of the company and what help you need.

It should be noted that for owner-managed businesses, there are usually tax savings made.

What is your experience?

We have a team dedicated to MVLs with a combined experience of over 100 years in the industry.

We are proud of our one-firm approach. We work alongside experts from other departments who can offer their services in getting your company ready in the most stress-free way possible.