- Review the company’s assets, liabilities and plans with us and your accountant.
- Agree the scope, fees and preparations, including the treatment of tax, contracts, outstanding claims and any assets that will not be sold for cash.
- Prepare the declaration of solvency and the required shareholder decisions and appointment documents.
- The liquidator deals with outstanding matters and makes distributions when appropriate. The company is dissolved after the liquidation is completed.
Members voluntary liquidation for solvent companies
A members’ voluntary liquidation, or MVL, is a formal process for closing a solvent company and distributing its remaining assets to shareholders. It requires a declaration of solvency and an authorised insolvency practitioner to act as liquidator.
BusinessRescueExpert helps directors and shareholders assess whether an MVL suits their circumstances, what needs to be prepared and how the process will work. Discuss an MVL or call 0333 939 80 40.
The video provides a general overview. For current tax rates, eligibility and fees, read the guidance below and check your circumstances with your tax adviser.
Is your company suitable?
The key legal test is solvency. After a full inquiry into the company’s affairs, the directors making the declaration must have reasonable grounds to believe that all debts can be paid, with interest at the official rate, within no more than 12 months from the start of the winding-up. Known and potential liabilities need to be considered.
The availability of a particular tax relief is a separate question. A company does not need to qualify for Business Asset Disposal Relief to use an MVL. If there is doubt about the company’s ability to pay its debts, speak to us before making a declaration.
How the process works
Distributions and timing
The timetable for an initial distribution can differ from the time needed to complete the liquidation. Available cash, creditor claims, tax matters and the assets involved affect when funds can be released. We will explain what is achievable for your company; a short appointment timetable does not mean the entire liquidation will finish within the same period.
Tax treatment of distributions
MVL distributions are generally treated as capital distributions, but the result depends on the shareholder’s circumstances and applicable anti-avoidance rules. Your accountant or tax adviser should check the position before a decision is made.
Tell your tax adviser if you plan to carry on the same or a similar activity after liquidation, because this can affect the tax treatment.
Business Asset Disposal Relief
As at 28 October 2026, Business Asset Disposal Relief applies an 18% rate to qualifying gains from disposals on or after 6 April 2026, within the available lifetime limit. Eligibility is not automatic: relevant conditions include the qualifying period, the shareholder’s role and rights, and the company’s trading status. Different rules can apply to EMI shares.
See HMRC’s Business Asset Disposal Relief guidance and ask your tax adviser to check your circumstances.
Fees and next steps
We will quote for your company’s circumstances and explain the professional fee, VAT and relevant expenses before you instruct us. Complexity, asset types and unresolved matters can affect the work required.
To start, provide recent accounts, an estimate of assets and liabilities, shareholder details and your intended closure date. Contact BusinessRescueExpert. If the company cannot pay its debts, ask us about the appropriate insolvency options, including CVL.
Common questions about solvent liquidation
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