A Members Voluntary Liquidation (MVL) is a formal Insolvency process where directors and shareholders of an solvent company decide to voluntarily close the company down.
A Members’ Voluntary Liquidation (MVL) is a process used to wind up the affairs of a solvent company. It allows the company to distribute its assets to shareholders and formally close the business in an orderly and efficient manner.
The MVL process begins with a board meeting where directors decide to propose an MVL, followed by a declaration of solvency. Shareholders then pass a resolution to wind up the company, and an insolvency practitioner is appointed as the liquidator. The liquidator manages the liquidation process, including distributing the company’s assets to shareholders. The process concludes with a final meeting where the liquidator presents a final account to shareholders, and the company is dissolved.
Directors approve the notices for the Members’ meeting, nominate a chairman, and decide who will swear the Declaration of Solvency.
Notices are issued for a Members’ meeting to pass resolutions for winding up the company, appointing Liquidators, and setting their remuneration.
Directors swear a declaration confirming the company can pay its debts within 12 months, including a statement of assets and liabilities.
Members pass resolutions to place the company into liquidation, appoint Liquidators, and approve their remuneration (requires 75% majority).
Liquidators notify the Companies Registration Office (CRO) and advertise the resolution in Iris Oifigiúil.
Liquidators sell assets and distribute proceeds according to statutory priority, obtaining indemnities from Members if needed.
Liquidators obtain clearance from the Revenue Commissioners on the company’s Corporation Tax affairs.
If liquidation exceeds 12 months, a general meeting is summoned, and a report and statutory receipts and payments account are filed with the CRO.
Liquidator calls a general meeting to present an account of the liquidation.
The company is dissolved three months after the final meeting’s return is registered. Records can be destroyed one year after dissolution.
An MVL is a process used to wind up the affairs of a solvent company. It allows the company to distribute its assets to shareholders and formally close the business.
A company should consider an MVL when it is solvent, meaning it can pay all its debts in full within 12 months, and the directors and shareholders have decided to close the business.
The duration of an MVL can vary, but it typically takes between 6 to 12 months, depending on the complexity of the company’s affairs.
Costs can vary based on the complexity and size of the company. It includes the liquidator’s fees, legal fees, and any other professional fees incurred during the process.
Employees will be made redundant, but they are entitled to statutory redundancy pay and other owed payments, which the company must settle before distributing assets to shareholders.
No, once the MVL process begins, the company must cease trading. The liquidator will handle the winding-up process.
The liquidator’s role includes:
Once the liquidation process has started and the liquidator has been appointed, reversing an MVL is complex and generally not possible. It requires a court order and is subject to strict legal criteria.
Directors must ensure the company is solvent and provide a declaration of solvency. Shareholders will receive their share of the company’s assets after all debts and liabilities have been settled.
At McCambridge Duffy, we bring extensive experience and expertise to the MVL process, ensuring a smooth and efficient wind-up of your company.
Our team of licensed insolvency practitioners is dedicated to providing professional and personalized service, guiding you through each step with clarity and confidence. We understand the complexities involved and are committed to achieving the best possible outcome for you and your shareholders. Trust McCambridge Duffy to handle your MVL with the utmost care and professionalism. If your company or your client may need an MVL, our experienced team is here to help. Contact us for a free & confidential consultation.
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