Members Voluntary Liquidation (MVL)

Members Voluntary Liquidation (MVL)

In this 2-part video series, Director, Sarah-Jane O'Keeffe explores the restructing options available to companies that have reached their end of life or are looking to wind down. 

What is a Members Voluntary Liquidation (MVL)? 

Members Voluntary Liquidation (“MVL”) is a process used to wind up a company that is solvent in accordance with the Companies Act 2014. The MVL process is a formal process that seeks the appoint­ment of a liquidator to a solvent company in order to wind the company up and distribute the assets, (be it cash or other) to the shareholder of the company.

To place the company into an MVL, the following is required:

• Director’s meeting;
• Declaration of Solvency with an Independent accountants Report;
• Shareholder meeting resolving to place the company into liquidation. This can be done by way of written resolution also.

Once appointed, the liquidator will write to all parties affected by the liquidation, pay any accruals, seek Revenue clearance, and distribute the balance of funds or assets to the shareholder.

What is a key advantage of an MVL?

This can be a tax efficient way for shareholders’ to extract funds from a company on cessation of trade as a capital gain on shareholders’ funds will be subject to Capital Gains Tax.

Where such funds are taken out as salary or dividend pre-liquidation, these monies would have been taxed at the shareholders marginal income tax rates.

This is a straight forward process that leaves the final matters of the company for the liquidator to deal with taking the stress away from directors and shareholders.

We are here to help

If you feel this is an option you would like to explore more for your company, or perhaps you are a fund manager seeking to conclude the life of the Company in accordance with the Companies Act 2014, please get in touch Sarah-Jane today to discuss your options. We can also advise on the winding up of a company with the Central Bank.