Members Voluntary Liquidation (MVL)

Members Voluntary Liquidation (MVL)

An MVL is a solvent winding up of a company.

A liquidator is appointed by the shareholders where the company's assets are sufficient to settle all its debts within 12 months. The MVL is a tax efficient way of turning reserves into capital and thereby paying Capital Gains Tax rather than Income Tax on any distribution.

Members Voluntary Liquidation is Used For 

• Streamlining a group of companies
• Retirement exit strategy 
• Demerging or splitting a business 
• Tax efficient wind up of Special Purpose Vehicles (SPV)

Procedure

• Board meeting held to resolve that the company is to be wound up and a meeting of shareholders to be convened
• Less than 5 weeks prior to the shareholders resolution to wind up the company, the majority of directors must make a statutory declaration that the company can meet its liabilities with interest, in full, within 12 months. (The insolvency practitioner or accountant usually assists in drafting this document)
• The liquidator will collect in the assets, agree creditors' claims and distribute any surplus funds to shareholders
• There is no duty for the liquidator in MVL to investigate the conduct of the directors
• It is a criminal offence to make a statutory declaration without reasonable grounds for believing it is true
• Members Voluntary Liquidation Flow Chart 
• See our case studies

If you need professional help or service with the liquidation of your company then call 07889 363 321 today or contact us here.

During the planning process Byrne Associates provided pragmatic, coherent guidance. The execution of the liquidations was extremely efficient and structured and the team was knowledgeable and helpful, delivering on time and within budget Director, group of companies