Getting maximum value out of a solvent company

Releasing capital out of a solvent business is relatively common and it entails raising funds from a business that has shut down or is otherwise not worth it anymore. When trying to release capital from a solvent company, the process is aimed at ensuring the company can wind down in an orderly manner and that any value it has is secured as transparently and efficiently as possible.

Members Voluntary Liquidation

There are many reasons why key stakeholders and directors might agree it is time to liquidate a business and get whatever value they can get from it. The process of doing so is called a Members Voluntary Liquidation (MVL) and you might also see it called a solvent liquidation.

Complexities

MVLs present their own set of challenges because every business’s circumstances are different. These levels of complexity can vary from the easy to manage, to some that are much harder to figure out and move forward. Because there is so much complexity involved in this process, it is important to find firms that can cope with the level of complexity a particular situation presents.  With extensive experience in offering members voluntary liquidation assistance, Chamberlain & Co can deal with even the most complex liquidation situations. Chamberlain & Co helps managers and shareholders to realise the capital value of their businesses, all while making the process efficient and cost-effective.

Taxes

When directors and stakeholders appoint liquidators to handle the winding down of a company, the aim of the liquidators is to get as much value out of the business and its assets as possible. This is so that the business can pay off all debts it owes to all its creditors.

In situations where voluntary liquidation is chosen, all the money that is left over after all creditors have been paid is subject to corporation tax. This means that the consequences of this process have to be thought about and planned very carefully. That said, MVLs are still a great way of raising money from a business that is winding down but that is not yet insolvent, as the taxes are generally very favourable if the correct procedures are followed.

Timing is everything

Timing is extremely important with MVLs and in cases involving voluntary liquidation. This is because, if everything is done as fast as possible, with everyone understanding the plan from the time it is conceived, the directors and stakeholder have a better chance of extracting better value from the business and getting as much as they can out of the voluntary liquidation.

Whatever the situation may look like, always remember to seek the best possible support and advice. In most cases, you might find a firm who understands the complexities of your situation and get a free consultation.

There is so much that goes on when a business or company is winding down due to solvency issues. The most important thing for all involved is to extract the minimum value from the business. The way, the final distribution is worth it for everyone involved.