How to Place a Company into Members Voluntary Liquidation (MVL)
A Step by Step Guide on How to Place a Company into Members Voluntary Liquidation
The first step in how to place a company into Members Voluntary Liquidation or MVL is for the Director/Directors of the Company to hold a meeting of Directors to pass a resolution to call a meeting of shareholders to place the Company into liquidation and another resolution to approve the Declaration of Solvency of the Company.
The law set out in The Insolvency Act 1986 says that the directors must thoroughly review the financial position of the company and when satisfied they must prepare a statement of affairs and sign a statement of truth that the assets and liabilities are accurately recorded and that there are a sufficient value of assets to pay all creditors in full with interest within twelve months ("A Declaration of Solvency"). That statement of affairs sets out:
- the estimated realisable value of the company's assets
- the value of creditors claims
- an estimate of the cost of the liquidation process
- and a balancing figure being the estimated monetary return to shareholders after all creditors have been paid in full and the costs of the process have been settled.
However Purnells will prepare all of the necessary documentation to place the Company into Members Voluntary Liquidation based upon the information provided by the directors to ensure that the entire process is as quick and and easy for you as possible.
Once this has been approved by the Directors a meeting of shareholders can be called. In a lot of cases, where the Directors are the only shareholders, the meeting of shareholders can be held the same day as the meeting of directors.
At the meeting of shareholders there is a little formality of signing several forms and the Company is in Members' Voluntary Liquidation. Following the Shareholders' meeting there is little for the Directors to do and the liquidator's duties usually consist of the following:
- advertises his appointment
- realises all assets
- settles creditors
- pays the costs of the proceedings
- returns the surplus to the shareholders
The procedure to follow as to how to place your company into Members Voluntary Liquidation is therefore straightforward and Purnells will prepare all of the documentation for you to make sure that the process to as quick and as easy for you as possible. There are some significant tax advantages of placing your company into Members Voluntary Liquidation and therefore if you would like to have a free meeting to discuss the options open to your Company please contact us on 01326 340 579.
Purnells have developed a guide to Members Voluntary Liquidations, which is available here, and should hopefully assist your understanding.