MVL (Members Voluntary Liquidation)

Members Voluntary Liquidation (MVL), sometimes also referred to as Members Voluntary Winding Up, is the liquidation of a solvent company.

An MVL is appropriate where a company is not in any financial difficulty and can afford to pay all of its creditors in full. However, for whatever reason, the directors have decided that they no longer wish for the company to continue trading.

Since a Members Voluntary Liquidation is not an insolvency procedure, a Statutory Declaration of Solvency must be made by the company directors in order to start the process. Although there is no need for any involvement from the courts, the directors must appoint a qualified Insolvency Practitioner as liquidator.

Unlike in a CVL, there is no need for a meeting of the creditors to take place as the Statutory Declaration of Solvency means they should all be repaid in full. There is also no requirement for the liquidator to report on the conduct of the directors. Due to this a Members Voluntary Liquidation usually costs less than a CVL.

Once the Liquidator has been appointed they perform the following duties:

1. Realise all assets in the company
2. Distribute the accumulated funds to the company's creditors in the correct order
3. Distribute the final balance, once the liquidators fees are taken, between the shareholders