An MVL is the process by which a solvent company is voluntarily wound up and its assets distributed by resolutions passed by its members (shareholders).

This usually occurs when the company's directors decide the company has reached its conclusion and has ceased trading.

The company must be solvent and able to pay its debts in full, together with interest at the official rate, within 12 months of liquidation.

A Licensed Insolvency Practitioner is appointed as Liquidator to effect the winding up of the company.

To appoint a Liquidator to collect the company's assets, settle any remaining liabilities and distribute its surplus assets to its shareholders.

Allows the affairs of the company to be properly concluded and its surplus assets distributed to its shareholders in a tax efficient manner. 

Following the conclusion of the liquidation the company will be noted on the register at Companies House as 'dissolved following liquidation'.

The directors instruct a Licensed Insolvency Practitioner (IP) to assist them in drafting the necessary documentation to place the company into MVL.

A board meeting of the company is held to pass a resolution to recommend to the company's shareholders that they should pass resolutions to effect the voluntary winding up of the company.

The majority of the company's directors must swear a Declaration of Solvency. This is a declaration that the company is solvent and will be able to pay its debts in full together with interest at the official rate within twelve months of the date of liquidation, and includes a statement of the company's assets and liabilities.

A copy of the directors' sworn Declaration of Solvency is sent to shareholders together with a notice either:

• Convening a meeting of the company's shareholders to pass resolutions to effect the voluntary winding up of the company, or

• Requiring shareholders to vote, by a specified date, on written resolutions to effect the voluntary winding up of the company. 

the resolutions put to shareholders will include a special resolution that the company be wound up voluntarily, and an ordinary resolution appointing an IP as liquidator.

The IP appointed by the shareholders as liquidator can be the IP who assisted the directors in preparing the documents, or an IP of the shareholders' choice.

Provided the requisite majority of shareholders vote in favour of the resolutions at the meeting, or by the date specified for voting on written resolutions, the company will then be in liquidation.

The requisite majority for the passing of a special resolution is 75% and for an ordinary resolution is 50% of shareholders' votes in favour of the resolutions.

To realise the assets of the company.

To pay any remaining debts of the company

to distribute the company's surplus funds to shareholders.

To ensure the company has tax clearance before concluding the liquidation.