We’ve put a handy guide together to help directors who may be thinking about a Members Voluntary Liquidation (MVL) gain a simple overview of the processes involved. If you’re unsure about what exactly an MVL is, read what is an MVL? first.
First, we draft and send the following documents to the directors:
- An engagement letter.
- The directors board minutes to agree to a Members Voluntary Liquidation.
- A notice to hold a meeting of shareholders (to decide on liquidation).
- The resolution of shareholders appointing a liquidator.
- A statutory declaration of solvency. This is effectively a current balance sheet which must be sworn as true before a solicitor.
- The certificate of appointment of a liquidator.
- A deed of guarantee and indemnity. The purpose of this is to cover us to pay you out in seven days.
Note that there are no creditors meetings and all of the paperwork can be done by post.
The directors and shareholders review the above paperwork, before signing and returning it to us. The declaration of solvency must be sworn by a majority of the directors before an independent solicitor.
All of the company bank funds are transferred to our designated client account. Banks will freeze the bank account on the date of liquidation, so this needs to happen before that date (so we can then pay the money out). We always ensure all funds are handled and stored securely for complete peace of mind.
The company then officially goes into liquidation. Notice of the Liquidator’s appointment will be sent to The Registrar of Companies and is also advertised in the London Gazette. Any creditors will be given 21 days’ notice to make a claim in the liquidation. Find out more about how long a company can stay in liquidation.
We will then calculate the distribution due to the individual shareholders. Some funds are held back to cover the fees and disbursements of placing the company into liquidation, together with any amounts which may be due to creditors.
Before the Members Voluntary Liquidation can be closed we need tax clearance from HM Revenue and Customs. They will request that all tax and vat returns and filed up to the date of the liquidation and all payments have been made. Once clearance has been received a final report is sent to the shareholders detailing the receipts and payments of the liquidation. A final account will then be sent to The Registrar of Companies and the company will be categorised as dissolved.
If you’re looking for more information, visit our Members Voluntary Liquidation page.