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What is an MVL?

A Members' Voluntary Liquidation (MVL) is the formal process to close a solvent company. It is the only way to officially close down a solvent company with net assets of £25,000 or more. 

If you’re looking to close a company, contact us and one of our team of experienced team will be in touch to discuss your options and provide you with a no-obligation fee quote.

Is an MVL the right solution for you?

If the directors or shareholders are planning to retire or return to permanent employment, or if the company is simply no longer needed (e.g., as part of a wider company restructure), an MVL can be a tax-efficient way of distributing the assets of the company to the shareholders and allowing them to get the value of the business in cash.

For a company to enter into a Members' Voluntary Liquidation it must be able to pay all its debts (plus any interest due) within 12 months.  If the company subsequently becomes insolvent or can no longer pay its debts, the MVL cannot continue, and the liquidator would need to convert the liquidation into a Creditors' Voluntary Liquidation (CVL).

How to get an MVL

Once the Directors have met and formally decided that the company should be placed into solvent liquidation, a liquidator must be appointed.  Once all the creditors’ claims have been agreed and settled, the liquidator will make a return of capital to the shareholders. 

The experienced team of licenced insolvency practitioners at Moore can help you through the process every step of the way, making sure that shareholders maximise the value of the return by taking advantage of the relevant allowances and reliefs available.

What happens during an MVL?

Your appointed Insolvency Practitioner (IP) will be able to handle your MVL process from start to finish.  Working closely with the company’s existing accountant they will:
  • Identify company assets
  • Pay any outstanding creditors
  • Ensure any tax due is calculated correctly and paid to HMRC
  • Return capital to the shareholders
  • Ensure the company is shut down correctly

The benefits of an MVL

An MVL can be a tax-efficient way of distributing the assets of a solvent company to the shareholders, allowing qualifying shareholders to benefit from business asset disposal relief (previously known as entrepreneurs’ relief) to maximise the value of their capital.

Unlike a CVL there is no Creditors Decision Procedure as creditors are to be paid in full.

How MOORE can help you

Our restructuring and insolvency team will help you to identify the most appropriate option for your business and will work with you to get the most value for all stakeholders.