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.

• From: The Insolvency Service
• Published: 16 July 2024

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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.

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Published 16 July 2024