A Members Voluntary Liquidation (MVL) is a voluntary closing-down process initiated by the shareholders of a solvent company looking to close the company and release cash and assets in the most efficient and orderly way.
It’s relatively straightforward and can be concluded in as little as ten days or sometimes even less.
An MVL is less expensive than other types of liquidation and the full procedure can be completed for as little as between £1,500 to £3,500 plus VAT and disbursements.
The MVL procedure is quite efficient and could be finalised within 10 days if every party is amenable. If issues become complicated then the process could be finished in just over six months.
Directors should finalise the businesses affairs before a meeting with shareholders. This includes raising final invoices, selling assets that aren’t going to be transferred as part of the business, paying outstanding creditors, deregistering for VAT and PAYE, preparing draft final accounts and corporation tax returns and paying the estimated corporation tax balance.
Shareholders are informed of the declaration of solvency and invited to a meeting usually within two weeks of the decision to liquidate. The older the company is, the longer has to be given for shareholders to attend, although if 90% of them are actively involved in the process then this can be accelerated.
After the business is formally liquidated, any remaining assets can be realised and distributed to any remaining creditors and members. Once this has been finalised and final clearance obtained from HMRC then the case is closed and the company formally dissolved three months afterwards.