A group of four manufacturing sector companies presented a particularly complex recent case for Begbies Traynor Group. The group was made up of a dormant company; a company registered in the Isle of Man; a trading company; and a holding company. The trading company had ceased to operate and there was no longer a requirement for any of the companies to remain active. The challenge was to extinguish the various entities and to release the cash in the most efficient manner.
After working closely with tax advisers, an MVL was considered the most tax-efficient way of distributing the cash surplus back to the holding company’s shareholders. This allowed for proceeds to be extracted from the company in a cost-effective manner, while also ensuring outstanding creditors were paid in full.
All creditors were confirmed through the MVL process and were paid in full. In total £7.83m was then distributed from the holding company to individual shareholders after all the dividends had been distributed upstream through the group. The company was then able to be formally closed in an orderly manner.
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