Process of a Members Voluntary Liquidation (MVL)

Published: 10/05/2021 By Jane Price

Here are the typical stages when processing a Members Voluntary Liquidation or MVL but timings will vary depending upon the circumstances of the case.

Day 1On receipt of signed engagement letter, questionnaire and accounts -

Finalise CT return for accounting period(s) to date of liquidationAppropriate documentation prepared and circulated to directors for review.
Confirmation that all pre-appointment tax returns are submitted or drafted in readiness for submission on date of liquidation.
Day 7Date of liquidationThis proposed date is changeable.

Director(s) meetingAgenda:
  1. Directors convene a general meeting of shareholders
  2. Directors approve a declaration of solvency

SwearingDirectors swear the declaration of solvency, with a solicitor in attendance.

General meeting of membersHeld at short notice and requires all members to attend
Votes are held on resolutions including
  1. Whether the company should be placed into liquidation 
  2. The appointment of liquidators
It is at this meeting that the company formally enters liquidation.

Post liquidation bank account is openedWe would expect to have the new account number within 24-48 hours.
Day 101st interim distribution to shareholders when appropriateWe will require indemnities to be signed by Shareholders if we are to pay an early distribution (eg before it is established there are no creditors).
Typically, this distribution will represent around 95% of the total expected net surplus.

Request for creditors to claimWe will place statutory adverts in the London Gazette providing circa one month notice to claim.
thereafterHMRC grants clearance to conclude the liquidationOnce all HMRC departments confirm they are not owed anything by the company. Clearance will be quicker if we can ensure that all pre-appointment tax returns are submitted including VAT de-registration, closure of PAYE scheme and all returns submitted plus tax paid (for VAT, CT and PAYE/NIC).
thereafterFinal distribution to membersThe balance of funds held after the payment of all costs and any creditors’ claims.
thereafterFinal report issued to membersFormal report summarising the liquidation and detailing the Liquidator’s final receipts and payments account.
8 weeks laterLiquidator takes releaseCopy of final report is filed at Companies House.
3 months laterDissolutionCompany is dissolved at Companies House.

If you would like to know more about how we can help you with an MVL call us to discuss – our initial consultations are free with no obligations to proceed.

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