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What are the costs of a Members Voluntary Liquidation?

Members Voluntary Liquidation (MVL), also known as Solvent Liquidation is a voluntary procedure that winds up solvent business affairs. Members Voluntary Liquidation is an efficient way of turning reserves (cash) into capital gain and thereby pay just 10% tax.
There are three costs associated with Members Voluntary Liquidation; the liquidators fee, a bond and the statutory advertising. Liquidators can agree to fix these fees and costs.

Find out more…

  • Members Voluntary Liquidation Costs in Detail
  • Liquidator Fees
  • Liquidator’s Bond
  • Statutory Advertising in an MVL
  • A Word of Advice

MEMBERS VOLUNTARY LIQUIDATION COSTS IN DETAIL

Liquidators should be able to quote you a fixed fee to liquidate the company as an MVL. It will be based on:

  • The value and complexity of the assets held
  • How much is unpaid and owed to creditors
  • How many shareholders there are to pay out
  • How up to date are you with the financial records

The simpler you can make the company before instructing the liquidator the better. It is usually best to have sold all the assets and have them in a bank account as well as having paid off all the creditors.

It’s obvious really – the simpler you can make it, the less the liquidator will charge.
There is no need to prepare the annual accounts from the last year end to the date of liquidation.

LIQUIDATOR’S FEES

The liquidator’s fee should cost from about £1,500 plus VAT upwards. That is the very simplest liquidation.
Some liquidators like our firm, Neville & Co, will quote a fixed fee to act as liquidators for your business.

MEMBERS VOLUNTARY LIQUIDATION IS AN EFFICIENT WAY OF TURNING RESERVES (CASH) INTO CAPITAL GAIN AND THEREBY PAY JUST 10% TAX

LIQUIDATOR’S BOND

The Liquidators Bond is a legal requirement for every insolvency practitioner to have for every individual case they take on. It is charged on a sliding scale based on the assets of the company and they should make no profit on it.
Some typical examples of the bond cost are:

Assets Bond Cost
£100,000 £340
£250,000 £520
£500,000 £680
£1,000,000 £1350
£2,000,000 £1550
£3,500,000 £1750
£5,000,000 £2000

STATUTORY ADVERTISING IN A MEMBERS VOLUNTARY LIQUIDATION

A liquidator is under a statutory duty to file papers with Companies House (who make no charge) and send copies of resolutions and notices to the London Gazette.
The London Gazette charge for this statutory service which is typically £305 per case.
It includes filing the resolution showing the date the liquidation has happened, who the liquidator is and how anyone should make a claim.
A notice will also be filed when the company liquidation has come to an end.

A WORD OF ADVICE

Be careful not to agree to a fee based on time costs (an hourly rate) if you can avoid it.
You should always take professional advice before making a decision. For a free consultation or to talk to our insolvency experts contact us today.