The Complete Guide to Members Voluntary Liquidation (MVL)

What is an MVL?

An MVL or members’ voluntary liquidation is a tax-efficient legal process used to close down UK companies that are solvent but no longer required.

Indeed, MVLs are the only form of solvent liquidation.

As a specialist procedure, MVL liquidation must be managed by an insolvency practitioner from a firm like Irwin Insolvency.

After being appointed as liquidator, your chosen IP will carry out the MVL process.

This involves winding up your company in a lawful, orderly manner, selling its assets, and distributing the proceeds proportionally among the directors and other shareholders (i.e. the members).

The members’ voluntary liquidation process is financially advantageous for individuals who have a say in the running of the business – those with voting rights, in other words – and offers attractive tax benefits, as we’ll explain later in this MVL guide.

As a result, an MVL differs from creditors’ voluntary liquidation (CVL) and compulsory liquidation, which focus on protecting the interests of parties seeking to recover money from insolvent firms.

Only companies with cash reserves and/or assets outweighing their liabilities can enter members’ voluntary liquidation.

In a nutshell, MVL liquidation doesn’t mean a firm is failing.

On the contrary, a company in an MVL is financially secure and successful.

The business is being wound up simply because it’s fulfilled its purpose and the directors are ready to move on.

If you’re ready to place your company in an MVL or want tailored advice, contact our experts today.

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