Members’ Voluntary Liquidation
Members’ Voluntary Liquidation (MVL) is the liquidation process used by solvent companies looking to close tax effectively.
Solvent: the ability to pay all creditors in full within a 1 year time frame
Top MVL Facts
- It is only available to solvent limited companies
- It is a formal liquidation process so will need to be performed by a Licensed Insolvency Practitioner
- It can be completed in a matter of months
- Shareholders can typically expect to receive a low 10% tax advantage on their shares
How will an MVL affect the director, creditors, company?
The MVL process is only used by a solvent company and therefore all creditors will be paid in full. If a creditor cannot be paid in full then the company cannot be technically solvent and this process would not be available to them.
Typically before the start of the process the company will have already paid creditors and ceased to trade. This will speed up the MVL process by helping to receive clearance from HMRC and their bank quicker, which means shareholders will receive their distributions sooner.
The main purpose for a director to choose the MVL process is to extract shareholder funds out of the company tax efficiently and to ensure the company is dissolved correctly.
What is the outcome of an MVL?
At the end of an MVL the main goals to be achieved include:
- Shareholders have received their distribution at a low tax rate
- The company has dissolved efficiently on Companies House register
What is the cost of an MVL?
Our fees start from £2,500 for the MVL process.