Although you cannot actually close the company yourself using Members’ Voluntary Liquidation, if the company has retained profits of £25,000 or more you can instigate the process by appointing a licensed insolvency practitioner.
MVL is a tax-efficient option as distributions are taxed as capital rather than income. Asset Disposal Relief, formerly known as Entrepreneurs’ Relief, can further lower your tax liability to 10 per cent if you’re eligible to claim.
Members’ Voluntary Liquidation may also be a good option if your company’s affairs are complex. This is because the process is conducted by a licensed IP and you have the reassurance that your affairs are being dealt with professionally.
The MVL procedure involves repaying all your creditors, selling or distributing the business’s assets, and apportioning the profits amongst members. Once this process has been completed the company is removed from the Companies House register.
What happens if your company is insolvent, however? Can you still close it yourself?