Members' Voluntary Liquidation (MVL)
A members' voluntary liquidation (MVL) is the liquidation of a solvent company and brings the company's life to an end. The directors initiate the MVL process but it is the shareholders who appoint a liquidator and since tihe company is solvent, all debts are settled and any cash remaining is passed to the shareholders.
There are many good reasons for an MVL and since distributions from liquidation are automatically treated as capital distributions, one of the most common is to ensure shareholders pay less tax.
We have also seen MVLs motivated by amongst other things, the company having run its course and being of no further use: the directors wishing to retire or under certain circumstances, to facilitate the reconstruction of the company and to create seperate businesses or companies going forward.
If you are considering bringing your company to a close we will provide you with a confidential consultation with either Shay Lettice or Kate Merry, our IPs. We will explain all the options that are available and their likely consequences and work with you to determine which is the most appropriate solution.
If you choose the MVL route we will help you demonstrate that the company is solvent and assist in all aspects of the process including convening a general meeting of members and managing the liquidation.
