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Members Voluntary Liquidation (MVL)

An Members’ Voluntary Liquidation (MVL) is a formal process used to close down a solvent company – one that can pay all its debts in full, including statutory interest.

What is an Members’ Voluntary Liquidation (MVL)?

MVLs are typically chosen when a company is no longer needed, and the directors or shareholders want a tax-efficient way to distribute the company’s assets. After the company’s assets are sold, proceeds are used to:

– Pay all creditors in full

– Cover the liquidator’s fees

– Distribute the remaining funds to shareholders

Why Choose an MVL?

There are many reasons why directors or shareholders may opt for an MVL, including:

– Retirement – winding down a family business or transferring funds into a personal estate

– Lifestyle changes – moving abroad or no longer wishing to run a business

– Tax efficiency – withdrawing funds in a more favorable tax environment

– Tidying up affairs – simplifying the closure of a company or group structure

– Corporate restructuring – following a merger or to streamline operations

– Group liquidations – multiple MVLs may be needed as part of a wider strategy

Who Is Eligible for an MVL?

An MVL may be appropriate when:

– The company is solvent

– The directors want a clean, legally sound closure

– The shareholders wish to withdraw their investment

– The business is no longer profitable but still holds surplus assets

– The directors are planning for retirement or exit

Advantages of an MVL

– Tax-efficient distributions to shareholders (often subject to Capital Gains Tax with potential reliefs)

– Saves time on ongoing statutory compliance and filings

– Reduces liability risks for directors

– Improves transparency by simplifying corporate structures

– Faster access to shareholder funds compared to other method

An MVL offers more certainty and control over outstanding liabilities compared to simply striking off the company.

Advice for Companies and Individuals

  • Creditors Voluntary Liquidation (CVL)

    If your company’s debts have become unmanageable and creditor pressure is mounting, it can feel overwhelming. In such cases, Creditors Voluntary Liquidation (CVL) could offer a structured and professional way to close the business and address its financial issues.

  • Administration

    Administration is a rescue process for businesses in financial difficulty which can sometimes result in the company becoming solvent again. Alternatively, a sale of the business could achieve continuity thus preserving employment and goodwill.
    Administrators, who must be Licensed insolvency Practitioners, can be appointed by the company, the Directors, a creditor or by a direct application to the Court. During this process, the company is protected from any creditor taking any legal or enforcement action.

  • Compulsory Liquidation

    Compulsory Liquidation sees company assets being sold involuntarily, the staff being made redundant and ultimately being struck off the register.

    Compulsory Liquidation is generally the least favourable insolvency process and best avoided if possible.

  • Bankruptcy

    If a situation arises where raising finance isn’t possible, your business is no longer viable and you have personally guaranteed money to creditors, one option available is bankruptcy.

  • Individual Voluntary Arrangement (IVA)

    If refinance isn’t the right solution for your problems, or you can’t find a lender prepared to offer the facilities you need to avoid bankruptcy, one possible solution is to enter an Individual Voluntary Arrangement (IVA).

  • Documents

    The following guidance sheets provide useful guidance of processes and other useful information. They are free to download.

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Get in Touch

All initial meetings are free and confidential. The first consultation will help us establish the current position and allow us to present a range of options available to you.

Send us an email at restructuring@groupams.co.uk or call us on 0161 413 0999.

Disclaimer

AMS Business Recovery & AMS BR is the trading name of Path Business Recovery Ltd, a company registered in England and Wales. Gareth Howarth & Philip Lawrence are Licensed Insolvency Practitioners authorised to act in the United Kingdom by the Insolvency Practitioners Association.

 

The company’s registered address is 1 Hardman Street, Spinningfields, Manchester, M3 3HF. Registered in England and Wales No.: 10149403. VAT No: 242 7332 23

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