If a company is solvent and has come to the end of its useful life, then an MVL could be the most tax efficient option to wind up the company.  The shareholders appoint a liquidator to realise and distribute the company’s assets.

If agreed by the shareholders, assets can be distributed in specie to the shareholders, for example, shares in a subsidiary. Hence, MVLs can be used to simplify a corporate structure, by removing a company from a group structure.

S110 agreements can also be prepared where different shareholders want different parts of the company’s assets.  For example, if a company has more than one business and the shareholders want to split the businesses between them.

If you are considering an MVL, please ensure you seek your own tax advice first.

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