Members Voluntary Liquidation (MVL)

Members Voluntary Liquidation (MVL) relates to the winding up of solvent companies. It is a company closing down procedure which provides a method for formally ending your business and distributing remaining assets after payment to all creditors.

A MVL can take place when the directors of a company believe that the company is solvent but they no longer wish for the company to trade. If a company has sufficient assets to be able to pay all its creditors in full the liquidation is referred to as a solvent liquidation.

The benefits of Members Voluntary Liquidation (MVL) are –

• the appointed liquidator will be responsible for distributing any funds and assets between directors and shareholders
• it is a cheaper and less formal option than Creditors Voluntary Liquidation
• the MVL can be used to separate different businesses within a company
• formally ends the life of a company, leaving no outstanding matters
• provides a potential tax efficient exit route to shareholders

The Members Voluntary Liquidation process is quite straightforward and can be completed in a matter of weeks. First of all company directors must agree with shareholders that voluntary liquidation is the best course of action and that all creditors and shareholders involved can be paid all money owed. Company directors must make a statutory declaration that they believe the company will be able to pay its debts in full within 12 months from the beginning of the winding up.

In order for a business to be put into liquidation an insolvency practitioner must be appointed. The insolvency practitioner is responsible for ensuring creditors are paid and assets are dealt with. If the liquidator decides that the company will not be able to pay its debts in full then the MVL can become a Creditors Voluntary Liquidation.

Members Voluntary Liquidation is appropriate when a solvent company has come to the end of its useful life and needs to be wound up. This may be the case for a number of reasons, for example –

• in a family business where the owners wish to retire
• shareholders want to retire and have company assets which they want to transfer into their personal estate
• there has been a breakdown in the relationship between directors
• changes in the market which result in the company no longer being viable

Business Members Voluntary Liquidation Advice

As part of one of the UK’s leading finance and debt advisors we can provide a wide range of specialist accounting, financial and insolvency advice for your business. We can liaise with your accountants, bankers and creditors as necessary to ensure that we provide the most appropriate solution for you and your business whether that is a Company Voluntary Arrangement, Members Voluntary Liquidation or any other alternative.

If you would like further information, without obligation, on the many options available to you then call us free today on 0800 043 50 43 or complete our enquiry form and we will ring you back at a tiem convenient to you.