Guidance
Director information hub: Members’ Voluntary Liquidation (MVL)
Members’ Voluntary Liquidation (MVL) is used when a company can pay its debts but the members (shareholders) want to close it.
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The are several reasons for using a Members’ Voluntary Liquidation to liquidate your company, including:
- retirement
- you no longer want to run a business
- enabling shareholders to formally close down a solvent company, treating all parties involved equally with any funds remaining distributed to members
Qualifying for an MVL
If you want to use a Members’ Voluntary Liquidation, your company must be:
- solvent (company assets are worth more than its debts)
- able to pay off its debts within 12 months
Applying for an MVL
You will need to engage a licenced Insolvency Practitioner to act as liquidator.
Directors must provide:
- the Insolvency Practitioner with information to assist with the liquidation
- a Declaration of Solvency to demonstrate that the company is eligible to enter into a Members’ Voluntary Liquidation
There are alternative liquidation processes for companies that are not solvent including Creditors’ Voluntary Liquidation (CVL) and compulsory winding up.