What are Members' Voluntary Liquidations (MVL)?
A Members’ Voluntary Liquidation (MVL) is the formal liquidation option for solvent companies. It enables directors and shareholders to close down a solvent company and for any remaining assets – after creditors have been paid in full – to be distributed to its shareholders in a tax-efficient manner.
The directors of a company make a formal declaration of solvency and file it with Companies House which must:
- be based on a full inquiry into the company's affairs
- state that all debts and interest can be paid within 12 months
- include an up-to-date statement of the company's assets and liabilities
- be made by the majority of directors of a company no more than five weeks before the passing of a resolution for voluntary winding-up.
A general meeting is held by the shareholders where the resolutions for winding up the company are passed, along with the appointment of a liquidator.
The liquidator will realise all remaining assets, pay creditors in full and distribute the remaining fund to shareholders.
When to consider Members' Voluntary Liquidations (MVL)
An MVL is the formal liquidation option for solvent companies. It is particularly appropriate for companies in the following situations:
- Director(s) retiring and looking to sell company assets
- The company no longer has a purpose
- Shareholders want to leave their position and extract their distributions
- Restructuring of company assets
- There is more than £25,000 cash to be distributed to the shareholders.
When appointed as under a members voluntary liquidation, our priority is to quickly realise all assets, identify and pay any outstanding creditors, obtain clearance from HMRC once all final returns are submitted and distribute surplus funds to shareholders. In some circumstances an early distribution can be arranged.
Members' Voluntary Liquidations (MVL) Advice Glasgow, Edinburgh and London
We understand that facing up to financial challenges can be an extremely difficult and stressful time. However, you should be reassured to know that there are options available and, with the right advice and support, you can take the necessary steps to improve your situation. For further information on Members' Voluntary Liquidations, contact us today at an office near you.