Reviewed: 5th February 2019
Unlike a Creditors’ Voluntary Liquidation (CVL), which is often entered into hurriedly due to acute financial difficulties and increasing pressure from creditors, Members’ Voluntary Liquidations (MVLs) typically tend to be more carefully thought out and calculated ahead of time. This is because MVLs are designed with solvent companies in mind and are often utilised by directors as an exit strategy when they decide to move on from their business. This exit from the company is often planned in advance, particularly in the case of retirement where the prospect may be in the pipeline for a number of years.
Ensuring your company is in the optimal condition upon entering a formal solvent liquidation procedure not only makes the process much swifter, but can also cut costs. Here are some of the things you and your accountant should look to do before your company officially enters into an MVL:
While these actions can all be dealt with after you formally engage a liquidator, it is often the best course of action to make sure these are done prior to engagement in order to save both time and money. However, this does not mean you should not seek the guidance of a professional before this point. In fact it is often extremely advantageous to have an initial discussion about your company and the prospect of an MVL before you go any further.
One of the benefits of being able to pre-plan an MVL procedure is that you can take advantage of the expert guidance of your accountant and an insolvency practitioner before you put the wheels in motion. This can help you clarify your position, ensuring an MVL is right for your company and your own circumstances and future ambitions, while also making sure you know the steps you should take prior to beginning the process formally. Depending on your situation there may be a more advantageous time to enter the liquidation process than another, but it is only by consulting a professional that this may become apparent.
If you are considering an MVL for your company and would like professional advice, contact Real Business Rescue today. You can arrange a free consultation with a licensed insolvency practitioner at any one of our 60+ UK offices who will help you understand the process and advise whether it is suitable for your company.
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