What is a Member’s Voluntary Liquidation (MVL)?
An MVL is the name given to a process whereby shareholders of a company voluntary liquidate the assets and close the company, striking it off as a legal entity.
If a company is solvent, with assets remaining inside it an MVL is the safest way of closing the company, settling any debt and allowing the value of the assets to be divided amongst shareholders. This process is often used in situations where Company Directors are approaching their retirement plan, and no one else has been appointed to replace them. It is also used for companies which have outlived their requirements and are no longer necessary as trading entities.
In all cases where assets amount to more than £25,000 (once any debts have been cleared) the company will need to appoint an Insolvency Practitioner (IP) to manage the liquidation process. This individual will assess the worth of the assets, ensuring that these are liquidated in the appropriate way, settling outstanding debts and dividing the remaining funds amongst all shareholders.