Members Voluntary Liquidation

From a directors point of view, a Members voluntary liquidation (MVL) is the most respectful way for a company to be closed. This is because the company isn't in trouble as such and is solvent, the directors just decide they don't want the company to trade any more. To begin a Members voluntary liquidation (MVL) the directors must formally declare the company solvent to confirm that the can pay off all outstanding debts.

Once the decision has been made to enter liquidation, a meeting of shareholders is called in order to pass the necessary resolutions and finally appoint a liquidator. The liquidators job is then the same as in any form of liquidation, they realise all of the assets in the company and distribute the accumulated funds out to creditors in the correct order. The final balance once creditors are paid and liquidators fees are taken is distributed between shareholders.

A Members voluntary liquidation also usually costs less than a CVL as no creditors meeting takes place as there is no need because the declaration of solvency should mean that all creditors are paid in full.

Another bonus from a directors point of view is that the liquidator doesn't have to report on the conduct of the director whereas they would in other forms of Liquidation and therefore, coupled with the fact the company was solvent, the directors can maintain a good reputation.