Sterling Ford - Insolvency & Bankruptcy Services


   Members' Voluntary Liquidation - MVL
Members Voluntary Liquidation - MVL
A Members Voluntary Liquidation or MVL may be appropriate for a company when:
  1. there has been a breakdown in the relationships between the directors or shareholders,

  2. there are changes in its markets that result in the company no longer being viable,

  3. the shareholders wish to remove their investment from the company,

  4. the directors wish to retire,

  5. it has met the objectives for which it was incorporated


Members Voluntary LiquidationThe Members Voluntary Liquidation or MVL procedure may only be used for companies which are solvent, i.e. where their assets exceed their liabilities. MVLs provide a greater degree of certainty regarding ongoing liability than striking-off and can be a useful tool in the restructuring of companies, their businesses or property.

ESC-C16 Reforms and Why You Might Prefer a Members Voluntary Liquidation (MVL)
With effect from 1st March 2012 the ESC-C16 (Extra-Statutory Concession C16) was legislated under The Enactment of Extra Statutory Concessions Order 2012 (ESC Order). Prior to 1st March 2012, the ESC-C16 served as an effective way for company Directors to dissolve solvent companies and distribute surplus funds to shareholders as a return of capital, without having to use a Members Voluntary Liquidation, whereby each application for the ESC-C16 was sent to HMRC for tax clearance and to verify that it was in no way being used to obtain an unfair tax advantage.
In December 2011, the new legislation was passed limiting capital distributions on dissolution to the first £25,000, with any sums distributed in excess of this limit to be taxed as income. Under the new provisions, utilising an MVL is far more advantageous as there is no £25,000 capital distribution limit and thus all distributions are treated as a capital receipt.
The new provisions also apply in cases where only tax clearance was obtained prior to 1st March 2012 and only those cases where the actual distributions were made prior to this cut off will still qualify under the pre-legislated ESC-C16. [For more information see links: http://www.legislation.gov.uk/uksi/2012/266/article/16/made; http://www.hmrc.gov.uk/tiin/tiin-esc-c16.pdf]
To avoid the limitations of the ESC Order, contact Sterling Ford to place your company into MVL instead. With fixed fee packages available for single member companies from just £1,250 plus VAT and disbursements, there isn't a more cost effective way of taking advantage of the Members Voluntary Liquidation procedure early distributions of up to 75% of cash balance transferred available within one month of appointment.
For our fixed fee and disbursement schedule for single/married couple member companies, please click here.

For our Cost-Effective Solutions for a Solvent Companies/LLPs, see our Liquidation Direct services by clicking on the following links:

For solvent companies, click MVL Direct
For insolvent companies, click CVL Direct

For a different perspective, call us now on 0808 171 2291 or complete our enquiry form.