Advice on members Volutary winding up

Clients needing to close their solvent companies, do we need and insolvency pracrticiioner

Didn't find your answer?

I haven't closed a company in years. Most of my Limited company clients are now of an age they are retiring and I have been winding down for sometime as i work in industry as well. Two clients are about to close and we have finalise dthe last accounts. Retained earnings are more than £25K. I have spoken to my professional body to suggest I may need to transfer the work to an insolvency practicioner they quoted the government site information at me. Does anyone have any advice here? I hold a general practice certificate with the ACCA. 

Replies (4)

Please login or register to join the discussion.

avatar
By Mr_awol
08th Mar 2023 16:21

Well you dont 'have to' appoint an IP. Your clients could take a dividend equal to the remaining reserves - in one go or over several years. Whether they'd want to would depend on how much reserves are left, whether they have any BR band remaining, etc and how quickly they want/need the cash. In certain circumstances you could get it out cheaper by dividend, although not perhaps as quickly.

Your clients may also be able to make a sizeable pension contribution, with or without CT relief, depending on the circumstances.

An IP will probably charge about £4k so you'll need to factor that cost in too, as well as the annual accountancy costs if you do decide to dividend it out over several years.

You cant pay dividends to get the reserves down, although you can pay dividends and then decide to liquidate (subtle difference).

Thanks (0)
avatar
By Roland195
08th Mar 2023 16:27

In my experience at the moment, MVL's are both unreasonably expensive and protracted so I would suggest doing the sums to find out if this would be the best option after allowing for any potential BADR.

Thanks (0)
Lisa Thomas
By Lisa Thomas - Insolvency Practitioner
09th Mar 2023 09:15

If the client wants to wash the company through an MVL then yes, they will need a licensed, appointment-taking IP to do it.

The costs can often be worth while if BADR applies. Costs tend to start at c£3k plus VAT. The VAT can be reclaimed if the company is VAT registered.

Thanks (0)
avatar
By HeatherSimpson
14th Mar 2023 10:45

Again I haven't now done one for years but subject to the advice above about getting funds out tax-efficiently, the client and/or I used to handle very small solvent dissolutions, subject to an ever-updated control checklist and https://www.gov.uk/government/publications/company-strike-off-dissolutio...

I.e ensuring that the company is and remains solvent and that everyone and his dog that might be interested is informed well in advance. I am also ACCA, so a new engagement letter to include supporting the dissolution process.

There is also support from the ACCA of course: https://www.accaglobal.com/pk/en/technical-activities/technical-resource...

Thanks (2)