Navigating Success: A Tech Start-Up Completes an MVL with Parker Walsh

Launched in 2018, the business was that of a tech start-up specialising in cloud-based software for project management. The Founders built the company from the ground up, quickly gaining traction with their innovative platform and acquiring a loyal customer base.

In 2024, after several years of growth, the company was approached by a larger technology firm interested in acquiring their product and integrating it into their suite of services. The acquisition was a success, leaving shareholders with the opportunity to close the company and focus on new projects.

After careful consideration, they decided on a Members’ Voluntary Liquidation (MVL) to wind down the business in a way that maximised tax efficiency and ensured compliance with legal and financial obligations. They entrusted Parker Walsh to guide them through the process.

The Challenge

Although the company was solvent and financially stable, the MVL process presented several challenges. The directors needed expert advice to ensure a smooth and compliant closure. They also wanted to make the most of available tax reliefs, including Entrepreneurs’ Relief (now Business Asset Disposal Relief), to reduce the tax burden on their distributions.

Additionally, the liquidation required the orderly resolution of outstanding obligations, including final payments to creditors and the distribution of remaining assets. Clear communication with stakeholders was critical to maintain the company’s positive reputation.

The Solution

Parker Walsh’s experienced team developed a comprehensive plan to streamline the MVL process for the company. Key actions included:

1. Initial Solvency Assessment: We conducted a thorough review of company’s finances, confirming the company was solvent and capable of meeting all liabilities.
2. Appointment of an Insolvency Practitioner: Molly, our leading Insolvency Practitioner, was appointed to oversee the liquidation process and ensure compliance with all legal requirements.
3. Asset Realisation and Distribution: Parker Walsh worked closely with the directors to realise the company’s assets, including intellectual property and cash reserves. We ensured that the distribution of proceeds to shareholders was handled efficiently.
4. Tax Optimisation: Our team provided detailed advice on structuring distributions to take full advantage of Business Asset Disposal Relief, significantly reducing the founders’ Capital Gains Tax liability.
5. Stakeholder Communication: To maintain goodwill, we facilitated clear and timely communication with the company’s remaining employees, creditors, and customers, ensuring a positive wind-down process.

The Outcome

With Parker Walsh’s expertise, The company successfully completed the MVL process in just under six months. All outstanding obligations were resolved, creditors were paid in full, and assets were distributed to shareholders in a tax-efficient manner.

The shareholders praised the seamless process, highlighting how our team’s professionalism and clarity allowed them to focus on their future plans without unnecessary stress. They are now pursuing new ventures, confident in the knowledge that their former business was closed responsibly and efficiently.

Why Choose Parker Walsh?

At Parker Walsh, we specialise in helping business owners navigate the complexities of Members’ Voluntary Liquidation. Whether you’re closing a business after an acquisition or planning a tax-efficient exit, our team is here to provide expert support every step of the way.

Contact Parker Walsh today to discuss your options with one of our experienced Insolvency Practitioners.

^{Photo by Mikhail Nilov}