Liquidate my solvent care home: Members’ Voluntary Liquidation (MVL)
Members’ Voluntary Liquidation involves a meeting of company members to vote on whether to enter MVL. If a sufficient number vote in favour, a resolution is passed to that effect. You must also appoint a licensed insolvency practitioner (IP) to administer the liquidation process.
Your care home business assets are processed by the IP – some may be purchased by yourself or other directors, for example, or sold to third parties. The proceeds then form part of your distributable profits once all liabilities have been paid.
MVL is worth considering if your retained profits are £25,000 or more, as distributions are subject to Capital Gains Tax (CGT). Your liability may be further lowered to an effective rate of 10% if you are eligible to claim Business Asset Disposal Relief (BADR).
Liquidate my insolvent care home: Creditors’ Voluntary Liquidation (CVL)
Creditors’ Voluntary Liquidation must also be conducted by a licensed IP. Part of their role in this instance is to investigate the reasons behind the company’s failure and submit a report to the Secretary of State.
By voluntarily placing your care home into liquidation, however, you reduce the chances of misconduct or wrongdoing accusations being made against you as you have prioritised your creditors’ interests. At the end of the liquidation, your company is removed from the official register at Companies House and permanently closes.