Members Voluntary Liquidation (MVL)

A Members Voluntary Liquidation is the most pleasant liquidations by a country mile.

A Members Voluntary Liquidation is a formal process allowing solvent companies to be liquidated resulting in any surplus funds/assets to be distributed to its shareholders.

There are several scenarios when an MVL is likely to be used:

• When a company has reached its natural end and/or if the owner of the business is retiring

• If there is a need to extract shareholder value in a tax efficient way

• If a company is operating several dormant or non-trading companies and wants to reduce the amount of unnecessary administration, audit fees and filing costs

• If there is a need to de-merge different parts of the business to allow for a sale or ring fencing to reduce risk

Some of the benefits of a Members Voluntary Liquidation are as follows:

• Distribution of funds/assets back to shareholders subject to capital gains tax rates

• Entrepreneurs' relief may be available resulting in a lower tax rate

• Separation of different parts of the business

• Used as part of a dispute resolution process

• Transfer of assets to a new company

So, as you can see a Members Voluntary Liquidation is only used in cases where the company is solvent and tends to bring an orderly close to the business.

For help on this and other matters please feel free to contact us.