0800 058 8196

Members Voluntary Liquidation (MVL)

Would you like to close your solvent company and extract cash from the sale of its assets? A Members Voluntary Liquidation, also referred to as an MVL, is a form of liquidation initiated by the shareholders of a solvent company.

Unlike a Creditors Voluntary Liquidation, a Members Voluntary Liquidation is the closure of a financially solvent company that can pay its creditors. MVLs are often used to close down companies or to extract cash from a business for retirement.

There are several benefits of an MVL. The simple process makes closing a company through MVL quite straightforward. Using an MVL to close a company can also lead to reduced taxes, compared to extracting cash in the form of a salary.

Are you considering an MVL to close your company? Read on to learn more about the MVL process and discover the advantages of using an MVL to close a company and sell its assets to raise cash.


What is Members Voluntary Liquidation?

Members Voluntarily Liquidation is a process by which a company’s shareholders wind up the company and sell its assets using a liquidator. Instead of being used to pay creditors, the cash raised from the asset liquidation goes to shareholders.

In order to use an MVL to close a company, the company’s shareholders must state that the company is financially solvent through a Declaration of Solvency and that the company is capable of repaying all of its creditors within 12 months or less.


What is the Members Voluntary Liquidation process?

Using an MVL to close a company is a relatively straightforward process. You (and your company’s other shareholders) will need to prepare a Declaration of Solvency stating that the company is financially solvent.

Once this has been prepared, a meeting of company shareholders is held. At this meeting, your company’s shareholders need to choose to voluntarily wind up the company.

Like other liquidations, a Members Voluntary Liquidation is made public through a listing in The Gazette. However, since an MVL is very different from other forms of liquidation, this listing is extremely unlikely to affect your company’s reputation.

A liquidator is appointed and your company’s assets are sold in order to extract cash from the business. A copy of the shareholders’ resolution is delivered to Companies House and the company is struck from the registrar and ceases to exist.


What are the benefits of using an MVL?

There are several benefits to closing a company using an MVL. Since the cash your business generates through the sale of its assets is a capital gain, it isn’t subject to Income Tax, potentially saving shareholders a significant amount of money.

Instead, your company’s shareholders will pay Capital Gains Tax on earnings from the company’s asset sale. Depending on the shareholder’s Income Tax rate, Capital Gains are taxed from 18 to 28 per cent.

Another benefit of closing a company through an MVL is that the process has little negative effect on your company’s reputation. This makes an MVL a good solution for solvent companies that are concerned about future trading conditions.


Get expert financial help

Would you like to learn more about the MVL process? Closing your company using an MVL is a cost effective and tax efficient way to extract value from the business as its trading history comes to a close.

Contact us to speak to a liquidation expert and learn more about the MVL process and its effects on your company. We can provide detailed information on how the MVL process works to help you make the best decision for your business.


Learn more about liquidation