What is a Members Voluntary Liquidation?
A Members’ Voluntary Liquidation (or MVL) is the procedure to close your company if the company is solvent – in other words, there are sufficient company assets which can be sold or realised, to pay off all the debts of the company.
This can sometimes be a very fine decision because the costs of the process and interest on creditor balances need to be taken into account in the calculation.
Is an MVL the right choice for your company?
We would prepare this financial information (called a statement of affairs) from the records of the company and carefully discuss it with the directors before a final decision could be made.
Based on this information and our advice, you as a director, need to be reasonably satisfied that the company can proceed with a solvent liquidation and will be able to pay its debts within one year.
In practice, the declaration of solvency will have been prepared by an Insolvency Practitioner. It will also be necessary for there to be a shareholders’ meeting whereby at least 75 per cent of the members resolve that the company be wound up and a liquidator appointed.