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Members’ Voluntary Liquidation (MVL) Explained

Members’ Voluntary Liquidation (MVL) is a process used to close a solvent company, meaning it can pay all its debts. During MVL, the company’s assets are sold off, and any remaining funds are distributed to the shareholders. It’s a voluntary decision made by the company’s directors and approved by its shareholders to wind up the company’s affairs in an orderly manner.

What’s the Members’ Voluntary Liquidation (MVL) process?

Members’ Voluntary Liquidation (MVL) timeline

A Members’ Voluntary Liquidation is a fast and tax-efficient liquidation procedure for solvent businesses. The MVL timeline includes:

  • Appointing a licensed insolvency practitioner
  • Signing a declaration of solvency
  • Holding a shareholder vote
  • Winding up the company
  • Notifying creditors and advertising the liquidation
  • Distributing funds among shareholders
  • Company records removed from Companies House

The MVL process is handled by a licensed insolvency practitioner responsible for liquidating the business, distributing funds, and closing the company in an orderly and compliant fashion.

What is Members’ Voluntary Liquidation (MVL)

Understanding the Members’ Voluntary Liquidation (MVL) process

A Members’ Voluntary Liquidation is a seamless, tax-efficient solution for closing a solvent business. The process can be straightforward with an experienced licensed insolvency practitioner by your side. If you wish to close a solvent business and extract funds tax-efficiently, appoint a licensed insolvency practitioner to kickstart the MVL process.

Here’s the timeline for a Members’ Voluntary Liquidation:

1. Appoint an Insolvency Practitioner

If you want to close a solvent business with substantial retained profits, consider a Members’ Voluntary Liquidation. When appointing an insolvency practitioner to liquidate your company, check that they’re licensed, experienced, and reputable.

Approaching a trusted and licensed insolvency practitioner for initial advice can help ascertain whether an MVL is right for your business. A range of factors will be considered, including the financial health of the company, business debts and shareholder votes.

If an MVL is right for your business, the insolvency practitioner will advise you on preparing your business for the solvent liquidation process. As part of appointing a licensed insolvency practitioner to liquidate your company, you’ll need to sign a letter of engagement and agree to the terms of business.

At Solvent Liquidations, our service is delivered by fully licensed insolvency practitioners and company liquidation specialists.

3. Hold a shareholder’s general meeting

A general meeting must be held to allow shareholders to cast their votes on whether the company should enter a Members’ Voluntary Liquidation. If 75% of shareholders vote in favour of the MVL, the company will enter liquidation.

5. Capital distributions are made

The company must have no outstanding liabilities and HMRC must confirm that all outstanding taxes are paid. Once clearance is received, company funds will be distributed among shareholders. If a percentage of funds have already been released as part of an indemnity, the remainder will be paid.

2. Sign a declaration of solvency

To proceed with liquidating your company, the company director, or a majority, must sign a declaration of solvency. This is a legal document confirming your business is solvent, and therefore, able to settle company liabilities within 12 months of the liquidation process starting.

To confirm a business is solvent, the company balance sheet will be reviewed to ensure that enough funds will be remaining after outstanding creditors are paid, if any. This process must be carried out vigilantly, as falsely declaring that a business is insolvent is a criminal offence and therefore, could result in a fine or imprisonment.

4. Company enters liquidation

Once the company enters liquidation, the liquidator will prepare and submit the required documents, and notify the relevant parties, such as HMRC and Companies House. The liquidation will be advertised in the Gazette, a public record of company insolvencies, including solvent liquidations. Any outstanding company creditors, if any, will be invited to submit their claims at this stage.

6. Company closed

Once funds have been distributed, the company will be closed, and records removed from the Companies House register after 3 months.

The length of a Members’ Voluntary Liquidation is determined by the complexity of the business, typically ranging from weeks to months. If the company has no outstanding debts with creditors, it’s unlikely that objections will arise that could delay the liquidation process.

Company directors can prepare the business for the MVL process to speed up the MVL process.

Can I prepare my business for a Members’ Voluntary Liquidation?

While our insolvency practitioners will prepare your business for an MVL, there are some simple housekeeping tasks that you can complete to speed up the process. This involves settling any outstanding affairs with creditors, including collecting payments, and ensuring you’re up to date with payments.

If you have plans to dispose of any assets before the liquidation of your business, ensure you make the sale at market value. You may sell company assets before liquidating a solvent business to maximise the funds available to shareholders, providing creditor interests are protected.

Why Choose Solvent Liquidations?

At Solvent Liquidations, our team of licensed insolvency practitioners are respected industry experts with a proven track record spanning three decades. As the UK’s leading solvent company liquidation service, we guarantee a service that’s exceptional value for money, customer-driven, and cost-effective.

To understand if a Members’ Voluntary Liquidation is right for your company and the intricacies of the MVL process, get in touch to arrange a free, no-obligation consultation with an expert adviser. We offer a low-cost solvent liquidation service delivered by a licensed insolvency practitioner near you through our extensive office network across the UK.

MVL Explained

Our Step By Step Guide
An Members Voluntary Liquidation (MVL) is a formal process for closing a solvent company. If you’re ready to understand the benefits and steps involved, our comprehensive guides can help.

Members’ Voluntary Liquidation (MVL)
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We partner with accountants to streamline MVLs for their clients. If you have solvent businesses seeking a tax-efficient exit strategy, our expertise in Members’ Voluntary Liquidations can deliver seamless solutions – Explore Our MVL Services

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As the UK’s largest company liquidations provider, our MVL specialists have 35 years’ experience and a track record of supporting over 25,000 directors and counting. With unparalleled sector expertise and a highly experienced partner-led team, we are market leaders.

Solvent Liquidation made a complex process feel simple. Their expertise and support throughout my MVL ensured a stress-free and positive outcome.

Sarah Thompson

The team at Solvent Liquidation were incredibly professional and efficient. They handled my MVL with care, making the entire experience straightforward.

James Patel

I highly recommend Solvent Liquidation. Their clear guidance and knowledge made my MVL process smooth and successful. A fantastic service!

Oliver Williams