Members' Voluntary Liquidation (MVL): A Strategic Path for Solvent Businesses

At Company Money Worries, we understand that closing a successful business is a significant decision, often driven by strategic, personal, or financial considerations. A Members’ Voluntary Liquidation (MVL) is a formal process designed for solvent companies to close down voluntarily, allowing business owners to extract their assets tax-efficiently. Here, we outline the MVL process and how our expert team can guide you through this orderly and beneficial transition.

What is a Members’ Voluntary Liquidation?

A Members’ Voluntary Liquidation is a voluntary process initiated by the directors of a solvent company, meaning it can pay all its debts within 12 months. An MVL aims to wind up the company’s affairs, distribute the assets to shareholders, and ultimately dissolve the company. It is often chosen for its tax efficiency and the ability to return capital to shareholders in a manner that can be more favorable than alternative methods.

The MVL Process Explained

1. Declaration of Solvency: The process begins with the directors making a sworn declaration of solvency, confirming the company can pay its debts in full within 12 months.
2. Shareholders’ Resolution: The shareholders must pass a special resolution to agree on the liquidation, which is then filed with Companies House.
3. Appointment of a Liquidator: A licensed insolvency practitioner is appointed as the liquidator to oversee the process, liquidate assets, settle any debts, and distribute the remaining funds to shareholders.
4. Distribution of Assets: Once debts and obligations have been settled, the liquidator distributes the remaining assets among the shareholders according to their shareholdings.
5. Dissolution of the Company: After the completion of the liquidation process, the company is formally dissolved, ceasing to exist.

Why Consider an MVL?

• Tax Efficiency: An MVL can offer significant tax advantages, particularly concerning capital gains tax and Entrepreneurs’ Relief.
• Professional Closure: Ensures all legal and financial obligations are met in an orderly, providing peace of mind for directors and shareholders.
• Asset Distribution: Allows for a controlled and fair distribution of assets to shareholders.

How Company Money Worries Support Your MVL Journey

Expert Guidance: Our team provides comprehensive advice on the MVL process, ensuring you understand every step and its implications for your financial future.

Financial Analysis: We help you assess your company’s financial position to ensure an MVL is the best route for your circumstances.

Liquidator Selection: Leverage our network of licensed insolvency practitioners to find the ideal expert to manage your liquidation process smoothly and efficiently.

Ongoing Support: From the initial planning stages to the final dissolution of the company, we’re here to answer questions, provide support, and guide you through every aspect of the process.

Post-Liquidation Planning: Our support doesn’t end with the dissolution of your company. We offer guidance on the next steps, whether starting a new venture or planning your financial future post-liquidation.

Choose Company Money Worries for a Smooth MVL Process

Closing your solvent business through a Member’ Voluntary Liquidation is a significant decision. With Company Money Worries by your side, you can confidently navigate this process, knowing that every detail is handled with care, professionalism, and an eye toward your financial well-being.

Contact us today to discuss how an MVL can be the right choice for your business, and let us help you take the next step towards a new beginning with peace of mind and strategic advantage.