How much does a Members' Voluntary Liquidation cost?

What are the Costs and Fees Associated with Members' Voluntary Liquidation

Members' Voluntary Liquidation (MVL) can be used as an effective way to close down a company and convert its asset into cash that can be distributed amongst shareholders.

The main benefit of an MVL is that it allows the shareholders to extract the value of the business as cash in a cost-effective and tax-efficient manner. This is because the funds distributed via the MVL process are taxed as Capital Gains and not as income; this means there is a significant tax saving in comparison to withdrawing the value of the business in the form of dividends outside of a liquidation.

Cost of Disbursements - Gazette Notices, Search Fee, and Bond

Other than the liquidator's fee the main Members' Voluntary Liquidation fees are the disbursements, which include a number of Gazette notices, a search fee, and a bond with a variable premium which varies in cost but is dependent on the company's asset value.

“After submitting my '60 Second Test' I received a complimentary Insolvency Options guide packed full of useful information. The team of insolvency specialists phoned me back in less than 10 minutes after reviewing my details and guided me through the next steps. Really helpful! Thank you Sophie!”

Patricia 

 

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Sophie Schofield
Business Debt Expert

Liquidator Fees and Overall Cost of Members' Voluntary Liquidation

The cost of an MVL will vary depending on a several factors, including whether the company has been prepared as a “cash shell,” the value of the company's assets, and the liquidator appointed to carry out the procedure. Generally speaking, a headline figure anywhere between £995 - £4,000 can be given for a Members' Voluntary Liquidation process, however, you must exercise caution when it comes to extremely low quotes. 

Be sure that the cost you are given includes VAT, disbursements, as well as the liquidator's fees. Often, companies will hook you in with a low quote only to levy additional charges on you once you have started the liquidation. At Real Business Rescue, you will be told up front of the costs involved allowing you to make an informed decision. Furthermore, your MVL will be partner-led meaning you will receive the very best service from a licensed insolvency practitioner throughout the process.

The liquidator charges fees for carrying out the process of drafting and submitting the appropriate forms and facilitating the rest of the procedure. If the company is indeed solvent then these fees should be nominal in comparison to the amount of money that will be distributed to shareholders and will be easily covered by the company's assets.

The liquidator also has to handle filing accounts and all of the other technicalities. Your role as a company director during the MVL process is minimal and would typically be limited to co-operating with the appointed insolvency practitioner and providing any requested information.

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If you're interested in initiating a Members' Voluntary Liquidation or you have questions about the cost of doing so, feel free to send us an email or call us for free confidential advice. With 100+ offices across the UK, you’re never far away from expert and confidential advice.