Members Voluntary Liquidation (MVL)
A Members Voluntary Liquidation (MVL) is used to wind up a solvent company. It is initiated by the company’s shareholders (members) when they decide to cease trading (shutdown) and distribute the company’s assets among themselves. It is viewed as a tax efficient method of extracting value from the company.
However, unlike other forms of liquidation, an MVL is chosen when a company is solvent, meaning it can pay its debts and statutory interest in full within a 12 month period. So if your company is solvent and you’re looking to close it down, a MVL could be the best option for you.
At Springfields Advisory, we are experienced in helping directors close their companies through MVL’s. We will work with you to assess your company’s financial situation and advise you on the best way to proceed.
When is a MVL the best course of action?
There is no definitive answer to this question, as the appropriateness of an MVL will depend on the specific circumstances of the company and its director. However, some general factors that could make an MVL an appropriate course of action include when the company is no longer trading, when the director wants to retire or wind-up the company and start something new.
It is vital in knowing that an MVL can only be initiated when a company is solvent, meaning it can pay its debts and statutory interest in full within a 12 month period. As members will have to swear a declaration in view of this. In breach of this declaration the members may be subject to fines and/or imprisonment.
If your company is unable to meet these requirements it may be worth looking into Administrations/Pre-packs and Creditors Voluntary Liquidation.
Springfield will manage your MVL
If you’re interested in learning more about Members Voluntary Liquidation, please contact us today. We would be happy to answer any of your questions and help you get started on the process with a free consultation to see if you’re eligible and to devise the best exit strategy.
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