Closing down company - liquidation - post ESC C16 changes

[Maslins]

You need to weigh up the tax benefit of CGT over dividend for you personally, compared to the liquidators fees for a cheap members voluntary liquidation.

Prices have come down, a Google search will find prices sub £1k base fee, sub £2k all in.

[zippy.mini]

Sorry if this response it too late...

I am going through this now and have found a local insolvency practitioner who are going to do my MVL for £2200 + vat + disbursements. I had to pop in to see them and show them last year's accounts to get them to quote me, but it was worth it to save me £1300. I also spoke to someone else who quoted about £2500 + vat over the phone, so there are cheaper alternatives out there if you're willing to look.

Nixon Williams are my accountants and they have no problem with me using a different company to the one they recommended. SJD should be as accommodating I would have thought... The work is the same for them regardless....

[PorkPie]

Thanks all, what does "+ disbursements" mean?

[PorkPie]

Sorry if this response it too late...

I am going through this now and have found a local insolvency practitioner who are going to do my MVL for £2200 + vat + disbursements. I had to pop in to see them and show them last year's accounts to get them to quote me, but it was worth it to save me £1300. I also spoke to someone else who quoted about £2500 + vat over the phone, so there are cheaper alternatives out there if you're willing to look.

Nixon Williams are my accountants and they have no problem with me using a different company to the one they recommended. SJD should be as accommodating I would have thought... The work is the same for them regardless....

Also, do you have to "hand over the chequebook" to the liquidators? i.e. relinquish control of the company funds? The thought of that makes me very nervous...

[Clare@InTouch]

Also, do you have to "hand over the chequebook" to the liquidators? i.e. relinquish control of the company funds? The thought of that makes me very nervous...

I believe so, but you pay an insurance bond so that you're covered if they do a bunk.

Disbursements are costs incurred on your behalf, similar to when you pay search fees to a solicitor when you're buying a house.

[Maslins]

The disbursements as part of a liquidation are (unfortunately) fairly significant.

Two main costs:
1) advertising the strike off in the London Gazette (so any potential creditors can pipe up before the company's wound up). For our sister company these are £280+VAT.
2) a bond which protects your funds against malpractice by the liquidator whilst the funds are under their control. The amount here varies depending on the size of the bank balance, but expect to pay £200-350 for a bank balance £25k-200k.

In a liquidation, the liquidator is effectively taking over your entire business. For a typical contractor company at the end of its life this realistically would just involve the bank balance...but yes, you would need to transfer the entire bank balance to an estate account controlled by the liquidator.

[northernladuk]

So now there is a growth in liquidation and people setting up quick and cheap solutions we are going to see a growth in fraud and other dodgy dealings or is the system water tight?

[Maslins]

So now there is a growth in liquidation and people setting up quick and cheap solutions we are going to see a growth in fraud and other dodgy dealings or is the system water tight?

Fraud by who? The liquidators? Or company owners trying to get their money out in dodgy ways?

Liquidations can only be done by licensed insolvency practitioners, which isn't easy to get into. They'll also need to do money laundering checks on clients in the same way accountants do.

...so hopefully no more fraud than there was before.

[sbakoola]

I believe so, but you pay an insurance bond so that you're covered if they do a bunk.

Disbursements are costs incurred on your behalf, similar to when you pay search fees to a solicitor when you're buying a house.

At what point do you receive this insurance bond ? there is no way I am handing over the cheque book and company bank authority without any rock solid guarantees.

[Ruprect]

The disbursements as part of a liquidation are (unfortunately) fairly significant.

Two main costs:
1) advertising the strike off in the London Gazette (so any potential creditors can pipe up before the company's wound up). For our sister company these are £280+VAT.
2) a bond which protects your funds against malpractice by the liquidator whilst the funds are under their control. The amount here varies depending on the size of the bank balance, but expect to pay £200-350 for a bank balance £25k-200k.

In a liquidation, the liquidator is effectively taking over your entire business. For a typical contractor company at the end of its life this realistically would just involve the bank balance...but yes, you would need to transfer the entire bank balance to an estate account controlled by the liquidator.

At what point do you receive this insurance bond ? there is no way I am handing over the cheque book and company bank authority without any rock solid guarantees.

So the bond is part of the disbursements. I can handle that as long as it comes in before the chequebook goes out as you say!