Members’ Voluntary Liquidation (MVL) is an option for solvent companies wishing to wind down their activities.
It allows assets to be distributed in a tax-efficient manner and can help protect against future claims.
This option is only an option for solvent companies. This means the company must hold enough assets to be able to settle all liabilities and interest in full within 12 months.
An MVL often comes about if:
- The company has fulfilled its purpose
- Company directors wish to retire or no longer want to manage the firm
- The business is solvent but not making profit
- A merger is taking place
- Directors and shareholders are no longer willing to work together
- Directors and shareholders want to close the business and distribute money in a tax-efficient way.
- A MVL is a fairly straightforward process – the company winds down its business, creditor liabilities are settled and any remaining funds are distributed amongst the shareholders.