How do I make sure I close my company correctly?

At Opus, we are gearing up for a potential influx of contractors looking to close their companies with the changes to IR35 in April and the risk of Entrepreneurs Relief being removed. We are speaking to a number of contractors who are looking to accelerate their exit plans, and considering instigating either a share disposal or solvent liquidation process in advance of the new Tax Year (or indeed prior to the Budget on 11 March 2020).  For any person in this position, we would encourage you to get in touch as early as possible in order that the necessary steps can be put in place.  Opus undertakes urgent assignments routinely, and if the circumstances allow, it is still possible to arrange a liquidation and distribution in the current tax year, although that will not remain the case for much longer.

What is Liquidation?

Liquidation is a process whereby the affairs of a company are wound up by a liquidator, appointed by a resolution of shareholders, to deal with a company’s assets and distribute them, firstly to pay any liabilities and thereafter to a company’s shareholders. This page is focused solely on solvent liquidations, known as Members’ Voluntary Liquidations.

What is a Members’ Voluntary Liquidation?

A Members’ Voluntary Liquidation (‘MVL’) is a process used to wind up the affairs of a solvent company. An MVL is typically used where a company has come to the end of its useful life. For example, where an owner-manager or contractor has retired or entered full-time employment, or a business and/or its assets have been sold leaving only ‘a shell,’ or where a reorganisation has occurred.

Why a Members’ Voluntary Liquidation?

The MVL process facilitates a controlled exit allowing the contractors to extract the cash in their business in a tax effective manner.  There are often substantial tax advantages in conducting an MVL as the monies that will be distributed to shareholders represent a return of capital, on which capital gains tax is payable by the shareholder.  The alternative would be for dividend payments to be made and taxed at the prevailing income tax rate, which is often significantly higher.

Next Step

We are trying to keep the process as simple as possible for you. If you are ready to close your company, complete the questionnaire which will be sent directly to our liquidation team who will then send you a Letter of Engagement for you to sign before any work commences. Alternatively, if you would like to speak to one of our team first, please call 0121 222 4140 or complete the form below and one of our team will be in contact.

Complete our Pre-Liquidation Questionnaire

Opus Business Rescue has a dedicated solvent liquidations team, who have carried out a wide range of engagements of this type, from complex international matters to small contractor-type companies. We recognise that contractors typically operate using a very straightforward model where there are typically only one or two directors or shareholders, minimal (if any) physical assets and ordinarily no creditors other than HMRC and an accountant.

Our questionnaire has been designed to compile all the information we need to deal with your requirements following the cessation of your contractor business.

NB. We will review the information and call you to discuss before we commence the process.
Start Questionnaire

Let’s Talk

If you would rather speak to one of our liquidation team before completing the questionnaire, complete the form opposite and include a contact number and the best time for us to call you and we will be in touch.