Members’ Voluntary Liquidations

What is a Members’ Voluntary Liquidation or MVL?

A solvent liquidation, or members’ voluntary liquidation (“MVL”), enables the shareholders to put a solvent company into liquidation. MVL’s can be used:

  • to secure an orderly winding up of a company
  • by shareholders wishing to unlock their capital
  • to close down a subsidiary, within a group of companies, which has outlived it’s usefulness
  • as part of a company’s restructuring for the purpose of the sale of part of the business

The MVL is under the direction of the shareholders who appoint a liquidator.

The MVL procedure requires a Declaration of Solvency to be sworn, which states the directors have conducted a full enquiry of the company’s affairs and are of the opinion that it is able to repay it’s debts, with interest, within a 12 month period.

The liquidator is appointed at a General Meeting of the company, if approved by 75% of shareholders votes. The liquidator realises the company assets, settles any creditor claims and distributes the remaining assets to shareholders.

Members’ Voluntary Liquidations can often be a tax effective way for shareholders to unlock their capital.

Read our MVL Reminder blog.

For more help call our Kent Insolvency experts.

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