Can Someone Explain MVL?

[chilledbear 16]

I see a 'well known' poster on FF has brought MVL into the equation, Can someone explain what it means and is it likely?

[no12 0]

Quote:

A Members Voluntary Liquidation is a formal process for bringing the life of a limited company to an end so that the company can distribute its remaining assets to the shareholders. This can happen for reasons of retirement, intractable shareholder dispute, or simply because the limited company is no longer needed. The process can be done informally too, without the expense of a liquidation, subject to certain conditions, which is explained also. The company must be solvent, i.e. it can afford to pay all its creditors so that there is something left over for the shareholders. If the company is insolvent, it must be dealt with by another type of insolvency procedure, whether administration, receivership, voluntary arrangement, creditors' voluntary liquidation or compulsory liquidation.

 

The main advantage of the members voluntary liquidation liquidation procedure is that distributions made in the liquidation count as capital receipts in the hands of the shareholders rather than income, and are subject to capital gains tax rather than income tax. This is likely to be beneficial if Entrepreneur's Relief is available for liquidations of trading companies

 

Although Members Voluntary Liquidations are for solvent companies, the process is in many ways similar to handling an insolvent liquidation, for this reason, only a Licensed Insolvency Practitioner can legally be appointed Liquidator in an MVL.

 

A Members Voluntary Liquidation can also be used in a tax-efficient manner where a company running more than one business wishes to split off one or more businesses. This is known as a Section 110 reconstruction and is explained below.

End quote.

 

Is it likely? Well I don't think anybody would be brave enough to suggest it - it would certainly not be in the club's interest, at the moment. A more likely scenario is that we lose the appeal on the tax issue (which is apparently VERY likely, unfortunately) at which point a MVL becomes impossible as it is an available option for solvent companies only.

[rbr 1,256]

The tax issue has nothing to do with us , why does this keep getting brought up

[BrahimHemdani 1]

Quote:

A Members Voluntary Liquidation is a formal process for bringing the life of a limited company to an end so that the company can distribute its remaining assets to the shareholders. This can happen for reasons of retirement, intractable shareholder dispute, or simply because the limited company is no longer needed. The process can be done informally too, without the expense of a liquidation, subject to certain conditions, which is explained also. The company must be solvent, i.e. it can afford to pay all its creditors so that there is something left over for the shareholders. If the company is insolvent, it must be dealt with by another type of insolvency procedure, whether administration, receivership, voluntary arrangement, creditors' voluntary liquidation or compulsory liquidation.

 

The main advantage of the members voluntary liquidation liquidation procedure is that distributions made in the liquidation count as capital receipts in the hands of the shareholders rather than income, and are subject to capital gains tax rather than income tax. This is likely to be beneficial if Entrepreneur's Relief is available for liquidations of trading companies

 

Although Members Voluntary Liquidations are for solvent companies, the process is in many ways similar to handling an insolvent liquidation, for this reason, only a Licensed Insolvency Practitioner can legally be appointed Liquidator in an MVL.

 

A Members Voluntary Liquidation can also be used in a tax-efficient manner where a company running more than one business wishes to split off one or more businesses. This is known as a Section 110 reconstruction and is explained below.

End quote.

 

Is it likely? Well I don't think anybody would be brave enough to suggest it - it would certainly not be in the club's interest, at the moment. A more likely scenario is that we lose the appeal on the tax issue (which is apparently VERY likely, unfortunately) at which point a MVL becomes impossible as it is an available option for solvent companies only.

 

How would the tax issue affect Rangers International Football Club plc; its an oldco issue.

[trueblue 64 57]

It must be true, it was on FF.

[Little General 80]

It must be true, it was on FF.

 

There should be a disagree button on this forum.

 

Just because someone posted it on FF, doesn't mean that it's not credible.

[Rangersitis 0]

Needless attacks on the Orange Order; referencing a tax case which is completely irrelevant to the here and now.....methinks I should go and start a thread on the future of the monarchy.

[Rangersitis 0]

Putting aside the reference to the tax case, is there anyone who is able to answer the question posed by chilledbear?

[chilledbear 16]

Putting aside the reference to the tax case, is there anyone who is able to answer the question posed by chilledbear?

 

It looks as if it COULD happen if we are solvent.

 

Anybody ??

[Zappa 0]

Can you post a link to the FF thread this 'well known' poster was writing about the MVL stuff so that there's a direct reference to what's been said please?