Members’ Voluntary Liquidation (MVL) is where the shareholders of a solvent company adopt a voluntary winding up resolution and appoint a liquidator to realise the assets of the business in order to distribute the proceeds to company members.

To enter into an MVL the shareholders of a company must make a sworn Declaration of Solvency, which states that they have thoroughly reviewed the company’s balance sheet and finances and have concluded that it is solvent and able to reasonably repay all existing and prospective debts within a period of no more than 12 months.


  • The main advantage of a Members Voluntary Liquidation is that taxation is applied as if distributions were of a capital rather than an income nature. Such capital distributions should be more lightly taxed than if the funds were extracted as dividends outside of an MVL procedure.
  • The use of a formal Members Voluntary Liquidation enables the restructuring of a group of companies and the extraction of value to be effected in as tax-efficient manner as possible.
  • Many owner-managed and family owned businesses opt to enter Members Voluntary Liquidation when the owners reach retirement age. The process enables time to be spent on appropriate tax planning for the benefit of the individual shareholders.

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Specific advice should be obtained before taking action, or refraining from taking action, on any of the issues covered above.

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