Voluntary Liquidation Agreement

For example, a company is liquidated and shareholders decide to take over a similar transaction or similar transaction within two years of liquidation. In these circumstances, HMRC may consider that the main objective of the liquidation process was to avoid tax and that it could attempt to reclassify distributions on the basis of income and not as capital gains tax. These include future liabilities, which are not yet crystallized and generally include closing the company`s accounts at HMRC, by producing and filing PAYE/NIC, VAT and corporate tax returns and paying all remaining debts. It may also include the payment of long-term contractual debts, such as leasing and financing contracts. Once 75% of the shareholders have approved the proposed decisions, the effective date of the liquidation takes effect immediately by sending back the notices. Wayne Harrison is a licensed judicial administrator with more than 25 years of insolvency experience to assist businesses in all sectors. Wayne is the Director of the London Office of KSA Group. Before arriving at the KSA Group in 2009, the IAP entrusted it with the regulation of judicial administrators. Wayne is an employee of Company Rescue. For more information on voluntary member liquidations, click here. You are also asked to sign a letter of commitment that formally designates us as liquidators of your company. There is a general meeting, and as long as the MVL is agreed by 75% of the shareholders, the company will be put into liquidation and the appointed judicial administrator will take control of the company`s affairs. A competent court administrator can ensure that your business closes best and at a lower cost.

Real Business Rescue offers a partnership service for all MVLs, which means that your business is handled individually in your local office and you always have a point of contact throughout the liquidation process. The main costs associated with concluding an MVL are the fees charged by the judicial administrator in charge of the liquidation. However, there are other small fees that you also have to bear; these are known as payments and mainly cover the legal information costs that we must withdraw on behalf of your company. The main advantage of a liquidation is to obtain the business of a company by appointing a liquidator in charge of the formalities and delisting the company from the register of companies or the dissolution of an orderly closure. In an MVL, liquidation should also lead to a distribution of the excess funds to shareholders/members. In addition, any distribution to shareholders/members may benefit from certain tax advantages. Liquidation – There are three types of liquidation: at this meeting of physical shareholders, decisions are made and the company is put into voluntary liquidation. MVLs are the appropriate means to liquidate a solvent business, while CVL (sometimes reduced to «voluntary liquidation») is when directors decide to voluntarily liquidate their insolvent business instead of waiting for forced liquidation.

In direct cases where there is no outstanding debt, the MVL process is usually completed and the business is formally closed within 6 months. However, distribution to shareholders is often made before that date, depending on the amount of assets and corporate funds. This requires signed compensation, which allows most of the funds to be paid almost immediately to shareholders, while the company is still in liquidation.

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