Members Voluntary Liquidation or MVL – A Guide
Got a company that has cash, assets, few liabilities and no future purpose? Then a members voluntary liquidation could be the most cost effective solution to your problem.
If the company has cash or properties that can be turned into cash then MVL can be used to distribute the liquid assets to shareholders or distributed “in specie” (NB subject to personal taxation depending upon an individuals circumstances). The company can then be dissolved and directors’ obligations removed.
Call us now for a Members Voluntary Liquidation – 0800 9700539
Important update: If you intend to take advantage of entrepreneur’s relief in the near future it might pay to bring your plans for a members voluntary liquidation forward. It is looking quite likely, that the relief will be reduced or amended in the March 2020 budget.
What is an MVL?
An MVL is a voluntary procedure to wind up the affairs of a SOLVENT company. If your company has cashflow problems or creditor’s actions against it, then this is not for you!! You need to consider options like company voluntary arrangement, administration or creditors voluntary liquidation (for INSOLVENT companies).
What does solvent mean?
It means that the company can pay all of its liabilities in full, plus statutory interest AND the liquidation costs involved in winding up the company, within 12 months of the declaration of solvency. This statutory declaration is required as part of the MVL process, the directors have to swear that the company is solvent and can pay all of its liabilities in full, plus statutory interest AND the liquidation costs involved in winding up the company.
How do we do that?
Call us and we will arrange for our licensed insolvency liquidators to call you and talk you through the process and help prepare the paperwork. Then you fill out a statutory declaration of solvency which is sworn in front of a solicitor. They will arrange everything else like creditors and legal notices, the meetings and guide you as directors and or shareholders.
You can get on with your life while they take care of the legal issues and then they will issue payments to shareholders in due course.
When is the MVL procedure appropriate?
The Members Voluntary Liquidation procedure is appropriate when a solvent company has come to the end of its useful life and needs to be wound up. For example:
- When a company is an old established family business where the owners / parents have retired and children or family do not want to run the business.
- Shareholders want to retire and have cash and a property within the company which they want to transfer into their personal estate.
- Where a rationalisation of a group of companies is required; this may involve more than one MVL or a transfer to trading companies within the group.
Remember, it is NOT appropriate if the company is insolvent. If this is the case and you swear the declaration of solvency, you could be committing a criminal offence.
So call now and we can will arrange for the appropriate insolvency practitioner for your circumstances to call you free of charge. All we need is your phone number or email address.