Return of Capital
Return of Capital is another term for solvent liquidation or Members Voluntary Liquidation (MVL). This is a formal process where a solvent company is wound up. This might occur if a special vehicle which has been set up for a specific purpose is now superfluous to requirements. It may also occur if there is a solvent winding down of a business or a UK operation or subsidiary is to be closed. An MVL is distinguished from insolvent forms of liquidation by a formal undertaking from the directors that the business is solvent and can pay all its debts, including statutory interest, in a period not exceeding 12 months. In the event that the business is insolvent or becomes insolvent then this procedure would become a Creditors Voluntary Liquidation (CVL) where the duty of the Liquidator is to realise the value of the assets of the business for the benefit of the creditors.
MVLs have many benefits including:
At Cork Gully, our team has years of experience dealing with solvent liquidations and will carry out this process for you quickly and efficiently.
We are able to help companies reorganise and simplify their corporate structure by dissolving inactive companies and entities so the business is streamlined and fit for purpose.
Group structures may become overly complicated for a variety of reasons – through longevity, international expansion, mergers and acquisitions, joint ventures and inter-company agreements. Inevitably the more complex the picture the more management and administrative resources are tied up in unnecessary and sometimes duplicate paperwork.
At Cork Gully our team works closely with tax advisors to ensure that the new corporate structure and its entities are simplified and that the optimum tax strategy is implemented.
Our assignments can entail the dissolution of companies through a series of Members Voluntary Liquidations (MVLs) and returning capital to shareholders, and also through strategic Creditors Voluntary Liquidations as appropriate, which can return cash via inter-company claims in the liquidation. Alternatively, advice can be given on the impact of the immediate dissolution and striking off of the company.