Members' voluntary liquidation (MVL)
An MVL is also known as a solvent liquidation. This liquidation procedure allows shareholders to put a solvent company into liquidation in order to unlock its capital.
This process can be utilised to secure the orderly winding up of a company or to close down a subsidiary within a group of companies that is no longer profitable or useful.
During the process of an MVL, the shareholders are required to appoint a liquidator. Additionally, a statutory declaration of solvency is needed, which declares that the directors have conducted a full enquiry of the company’s affairs and believe it can repay its debts, plus interest, within a 12-month period.
If approved by 75 per cent of the shareholders’ votes, a liquidator is appointed at what is termed a ‘general meeting’ of the company concerned. Once appointed, the liquidator then realises the assets of the company, settles any outstanding claims from creditors and distributes the remaining assets to company shareholders.
Since it is vital that the complete tax implications are considered at length by the company’s directors before choosing an MVL option, a member of our dedicated, knowledgeable team will explain every facet of this process in detail.
If you feel an MVL could be the best option for your company’s financial difficulties, speak to an experienced member of the team at Streets SPW. Our partners are licensed insolvency practitioners, they can act as liquidators for your company, drawing on their extensive industry knowledge to obtain the best results to benefit everyone concerned.