Members’ Voluntary Liquidation: How long does the process take?

What is the process for an MVL?

In a Members’ Voluntary Liquidation, the winding up of a solvent company is overseen entirely by a licensed insolvency practitioner. Their responsibilities include identifying company assets, settling any outstanding debts to creditors, and distributing the remaining funds among shareholders. Subsequently, the company is dissolved at Companies House, marking the end of its legal existence.

Guide to Timelines for Members’ Voluntary Liquidation

If you’re thinking about opting for a Members’ Voluntary Liquidation (MVL) to wind up a company and release its trapped funds, you’re likely curious about the overall duration of the process and what time frames to anticipate. To address this, we’ve put together the following timeline guide for Members’ Voluntary Liquidation:

What is the Duration of a Members’ Voluntary Liquidation?

• Directors kick off the process by sending a sworn declaration of solvency to the Registrar of Companies. This statement confirms they’ve assessed their finances and are confident in their ability to settle all current and potential debts (including interest) within 12 months.

• Within 5 weeks of making the solvency declaration, the directors must pass a resolution to formally initiate the winding-up process.

• Within 14 days of passing the resolution, an advertisement is placed in the Gazette, and a creditors’ meeting is convened. Creditors must receive notification at least one week prior to the meeting.

• Within 15 days of passing the resolution, it must be lodged with the Registrar at Companies House.

How Soon Are Funds Distributed to Shareholders in a Members’ Voluntary Liquidation?

• Typically, shareholders can expect to receive approximately 75% of the funds from the company within around 3 months of commencing an MVL.

• The remaining balance of the liquidation account is distributed to members once HMRC approves the case, which usually occurs within another 2 months.

• The precise duration until the liquidation proceeds are dispersed depends on how swiftly your bank transfers the funds to the liquidator, typically taking about 2-6 weeks.

• Due to the variable timeframe for this step, it’s not feasible to establish a precise MVL timeline applicable to all companies.

When Does a Members’ Voluntary Liquidation Conclude?

The conclusion of the Members’ Voluntary Liquidation (MVL) process occurs with the final meeting conducted by the liquidator. A notice of this meeting is sent to the London Gazette, and approximately three months later, the company is removed from the Registrar. However, directors retain the option to revive the company through a Court order within 6 years of dissolution.

Should you have any inquiries regarding the MVL procedure, don’t hesitate to consult one of our experts online or call us for a complimentary phone consultation. With an extensive network of over 100 offices, we provide confidential director support nationwide in the UK.