Voluntary Liquidation Ireland
Also known as Members Voluntary Liquidation (MVL), it is a winding up process where the company is solvent and the Directors / shareholders wish to do a voluntary / orderly wind up / want to close down a business (voluntary liquidation). MVL can be a popular route for companies that no longer need to trade (business retirement, business sale etc.)
MVL Liquidation – About
If you are considering a Members Voluntary Liquidation (MVL), HTH Accountants can help with any business related valuations required (identifying any elements of value, valuing assets – goodwill, equipment, clientbase etc. in advance of the company commencing the MVL. Visit HTH Accountant’s business valuations page for more information.
Voluntary Winding Up / Voluntary Liquidation
It may be the case that entering into a Voluntary Liquidation may not be the most appropriate course of action for the business / in the interests of Shareholders for a variety of reasons. HTH Accountants can examine the business in detail and present a number of options to you so you can make an informed decision whether a voluntary liquidation would be the best course of action. For instance, it may be more advantageous to sell all or part of the business rather than do a MVL.
Voluntary Liquidation Tax / CGT
There are tax considerations with a Members Voluntary Liquidation which would need to be examined and considered. Professional Independent tax advice is recommended – HTH Accountants are happy to provide you with a list of Tax Consultancy Firms who can help re: a MVL tax advice / business retirement tax advice / entrepreneur relief / business taxation advice in general. The MVL process could have tax implications for both the company and the shareholders under Capital Gains Tax rules etc.
Entrepreneurs Relief and MVL / Members Voluntary Liquidation
Entrepreneurs Relief can be applicable in relation to a Members Voluntary Liquidation (MVL) in certain circumstances. Professional independent tax advice would be required to determine Entrepreneurial Relief capital gains tax (CGT) benefits with regards to a MVL. There may be other alternatives to a MVL such as a business sale that could be more beneficial to the company owner/s / Shareholders in relation to tax where they could, for instance, still benefit from entrepreneurs relief.
For more information see Entrepreneurs Relief.
Voluntary Liquidation Process:
Solvent Liquidation
It must be a solvent company for a voluntary liquidation, i.e. in a position to pay all its debts and liabilities in full. A Board Meeting and also a Shareholders Resolution would be required. The company Directors will have to sign ‘A Declaration of Solvency’ stating the company is able pay all debts in full within 12 months from the commencement of the liquidation process. The process can take longer than 12 months depending on the complexities involved.
Shareholder Resolution for MVL
75% Majority Shareholder Decision – Entering into an MVL would require a Special Resolution which requires 75% majority.
Licensed Insolvency Practitioner for MVL
Appointment of an Independent Liquidator. A licensed insolvency practitioner is appointed by the Board/Shareholders.
Asset Distribution
Once all debts and liabilities of the business are complete, other remaining assets can be distributed to shareholders as per their shareholding.
Liquidator Controls Assets & Liabilities
Once a liquidator is appointed, they take control of the company’s assets and liabilities. They will then liquidate assets and distribute funds as required.
Distribution of Assets
Once all creditors are paid, if there are remaining assets these are then distributed to shareholders.
Final Accounts / Dissolution: The liquidator will files final accounts and request the company to be struck off the register with the Companies Registration Office.
For business valuations / asset valuations Contact Us:
Ph: +353 (0)1 5411446
Email:
Kieran Horgan: Kieran Horgan
or
Kevin Devane: Kevin Devane
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