Profitable Exit: A Family Business Completes an MVL with Parker Walsh

For over 25 years, the company had been a trusted name in bespoke kitchen and furniture design. Owned and operated by siblings, the business had grown steadily, building a loyal customer base and a strong reputation in their local community. However, as both approached retirement age, they decided it was time to step away and enjoy the fruits of their hard work.

After exploring their options, the directors concluded that a Members’ Voluntary Liquidation (MVL) was the best course of action. An MVL would allow them to close their solvent business in a way that maximised tax efficiency while ensuring all financial obligations were met. They turned to Parker Walsh for guidance through this complex process.

The Challenge

While the business was in a healthy financial position, the liquidation process required precise handling to ensure compliance with all legal requirements and the timely distribution of assets to the shareholders. The directors also wanted to retain the goodwill they had built with their customers, suppliers, and employees over the years.

Additionally, the duo wanted clarity on how to minimise their tax liabilities during the liquidation, particularly with respect to Capital Gains Tax and Entrepreneurs’ Relief (now known as Business Asset Disposal Relief).

The Solution

Parker Walsh began by conducting a thorough review of the company’s financial position. This included verifying that the company was indeed solvent and could meet all its obligations, including outstanding creditor payments, employee redundancies, and any other liabilities.

Once solvency was confirmed, our team created a detailed plan to guide the directors through the MVL process. Key steps included:

1. Appointment of an Insolvency Practitioner: Molly, our experienced Insolvency Practitioners, was appointed to oversee the liquidation and ensure compliance with statutory requirements.
2. Asset Valuation and Distribution: We worked with the directors to identify and value the company’s assets, including cash reserves, property, and equipment. These were sold or distributed equitably among the shareholders.
3. Tax Optimisation: Our team provided expert advice on structuring the asset distribution to minimise Capital Gains Tax. By leveraging Entrepreneurs’ Relief, James and Sarah benefitted from a significantly reduced tax rate on their gains.
4. Stakeholder Communication: We facilitated clear and transparent communication with employees, suppliers, and customers to ensure a smooth wind-down process, preserving the company’s positive reputation.

The Outcome

With Parker Walsh’s support, the MVL was completed within four months. All assets were distributed efficiently, creditors were paid in full, and the siblings were able to take advantage of favourable tax reliefs, maximising their financial return.

As a result, the directors entered retirement with peace of mind, knowing their business had been closed responsibly and that they could enjoy the next chapter of their lives without financial or legal concerns.

Why Choose Parker Walsh?

At Parker Walsh, we understand the unique needs of business owners looking to exit their ventures. Whether it’s a Members’ Voluntary Liquidation or another insolvency solution, our team provides tailored advice and expert support, ensuring a smooth transition for our clients.

If you’re considering closing your solvent business, contact Parker Walsh today for a no-obligation consultation.

^{Photo by Aaron Huber}