What is a members' voluntary liquidation (MVL) and where/when is it typically used?
Produced in partnership with Robert Smailes of Leonard Curtis Business Solutions Group & Simon Hunter of Three Stone
What is a members' voluntary liquidation (MVL) and where/when is it typically used?

The following Restructuring & Insolvency practice note produced in partnership with Robert Smailes of Leonard Curtis Business Solutions Group & Simon Hunter of Three Stone provides comprehensive and up to date legal information covering:

  • What is a members' voluntary liquidation (MVL) and where/when is it typically used?
  • Members’ voluntary liquidations

What is a members' voluntary liquidation (MVL) and where/when is it typically used?

Members’ voluntary liquidations

Voluntary liquidation or winding-up is a process in which the company, through the resolution of its members, decides to end the activities of the company and move towards the eventual dissolution of the company.

There are two kinds of voluntary liquidation:

  1. members’ voluntary liquidation (MVL), where the company is solvent and the members retain the majority of the control, and

  2. creditors’ voluntary liquidation (CVL), where the company is insolvent and the creditors take the majority of the control.

The difference between the two types of voluntary liquidation is whether the directors believe that the company is able to pay all its debts in full with interest at the official rate within a period not exceeding 12 months from the commencement of the winding up. If they do believe this, they state it on the declaration of solvency and can put the company into MVL. If not, it must enter CVL. See Practice note: What is a statutory declaration of solvency, what happens if the MVL fails and what are the

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