In this video, Michael Chamberlain takes us through the main points, advantages, and drawbacks of the Members Voluntary Liquidation.

What is it?

A Members Voluntary Liquidation (MVL) involves the directors swearing a statement, known as a declaration of solvency, to say the company will be able to pay all its debts within a period not exceeding twelve months.

Who is it for?

  • Shareholders who wish to minimise their tax liabilities on funds withdrawn at the end of the company’s life.
  • A company which may have come to the end of its useful life, possibly a dormant/redundant subsidiary company, where the shareholders have decided to cease trading but the company remains solvent.

How can Chamberlain & Co help?

The company will need to instruct an insolvency practitioner such as Chamberlain & Co to advise the directors on the most appropriate course of action. If liquidation is the chosen option a licensed insolvency practitioner from Chamberlain & Co can be appointed as the liquidator.

The Process

The directors of the company swear a declaration of solvency and by way of a Special Resolution the shareholders of the company resolve to place the company into liquidation and appoint a liquidator. The declaration of solvency must state that the directors of the company have conducted a full enquiry of the company’s affairs and have formed the opinion that it will be able to pay its debts with interest at the official rate within a period not exceeding 12 months.


  • The liquidator winds up the company minimising risk to shareholders who otherwise could be at risk of a creditor resurrecting the company for up to 20 years and making claims against them. This can occur if the company is subject to voluntary strike-off.
  • There can be tax benefits in considering a Members’ Voluntary liquidation. This process ensures that the final distribution is subject to Capital Gains Tax rather than Income Tax. Hence the top rate of Tax could be reduced from 50% to 28%, and/or even 10% if Entrepreneurs Relief is applicable.


  • The control of the company’s assets passes to an Insolvency Practitioner.
  • An advert for claims will be published for part of the closure process, but it will emphasise that the company is solvent.

Other Options Available

Company Voluntary Arrangement (CVA), Administration, Striking-off procedure under the terms of the Companies Act

Company Administration



Company Dissolution


Business Restructure

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