High number of businesses still “cashing out” post covid-19 Lockdowns

Hampshire based business recovery experts Portland Leonard Curtis has reported a high number of MVL (Members’ Voluntary Liquidation) appointments in 2021, in line with the trend in 2020.  An MVL is a process used for bringing solvent companies to an end, enabling the shareholders to extract any remaining cash or assets held in the business. The 12-month period in 2021 saw Portland Leonard Curtis pay out over £26 million to shareholders of 76 companies which included local businesses and large national brands. These businesses covered a wide range of industries such as a software developer, a long-established marketing and PR agency, a professional golf retailer, a specialist medical practice, property developers, investment companies, and several IT and management consultancies.

Portland Leonard Curtis, formerly known as Portland Business Recovery, joined forces with national firm Leonard Curtis at the end of 2021.  Leonard Curtis employs 250 people across 21 UK offices and as a collective group there were 433 MVL appointments in 2021 with distributions to shareholders totalling over £231 million.

High MVLs 2021

Portland’s deal with Leonard Curtis was designed to strengthen its presence on the South Coast, which has made Portland Leonard Curtis a national competitor in the corporate recovery and insolvency industry, evidence of which can be seen in the overall MVL figures for 2021 for the group. As well as the increased capability to handle MVLs, it has also enabled Portland Leonard Curtis to add more service lines to its existing recovery capabilities, especially around cashflow support and commercial finance, to support businesses facing financial difficulties and drive recovery growth post-Covid.

Carl Faulds, Portland Leonard Curtis Director said:

“Despite many businesses struggling in 2021, a number were well positioned to take advantage of the changes in buying habits and are now looking to extract capital on a tax efficient basis and utilise the lower rates of tax payable on capital gains. For others burdened with Bounce Back Loans, CBILS loans, landlord debts and HMRC arrears, all payable out of future profits, maintaining cashflow whilst the recovery takes place will be crucial. As part of the larger group with access to additional services, we are well positioned to be able to help businesses of all sizes deal with the financial consequences of the pandemic. As a company we have always considered ourselves to be approachable and nobody should be shy of asking for help coming out of an unprecedented event with unavoidable consequences.”

A Members’ Voluntary Liquidation is a cost-effective process for dealing with the closure of a company and the distribution of surplus funds to the shareholders (members). This typically happens after the company’s business has been sold, or the company comes to the end of its natural life, and results in shareholders receiving a return on their investment in a tax efficient way, usually with the benefit of Business Asset Disposal Relief (formerly known as Entrepreneurs’ Relief).

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