Professional SERVicesMEMBERS VOLUNTARY LIQUIDATION - MVL
A Members Voluntary Liquidation (MVL) is applicable where a company is solvent, has served its purpose and has no further function or where the directors would like to retire.
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Members Voluntary Liquidation
A Members Voluntary Liquidation (MVL) is applicable where a company is solvent, has served its purpose and has no further function or where the directors would like to retire. In addition, a MVL can help directors release shareholder capital in a very tax efficient manner. It should also be remembered that the company must have sufficient funds to discharge its liabilities within 12 months from the commencement of the winding up. However, where a company has no accumulated liabilities then it should be possible to conclude the winding up within approximately 3 to 6 months of the commencement.
To initiate the process of MVL the directors must sign a declaration of solvency in accordance with Section 207 of the Companies Act, 2014.
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Members Voluntary Liquidation Process
- Directors make a statutory Declaration of Solvency & place the company in an MVL.
- This Declaration is sent by post to all shareholders, including notice of a meeting of shareholders.
- A majority of the shareholders must vote in favour of the MVL for the MVL to proceed.
- The company closes, stops trading and the liquidator initiates their duties and procedures.
- MVL is also a very tax efficient way to wind up a company that is solvent & has no further function.
When can a company go into MVL?
This can take place when the directors believe that the company is solvent. A majority of the company’s directors must make a statutory declaration of solvency and then pass a resolution to wind up the company.
What does the declaration contain?
The statutory declaration will state that the directors of the company have made a full inquiry into the company’s affairs and that, having done so, they believe that the company will be able to discharge its debts in full within 12 months from the start of the winding-up procedure.
The declaration will include a statement of the company’s assets and liabilities as of the latest practicable date before making the declaration.
When does the liquidation actually start?
The liquidation starts when the members, at a general meeting, pass a resolution (Section 207 of the Companies Act, 2014) this is usually a special resolution to wind up the company voluntarily.
Must a notice of Voluntary Liquidation be given to anyone or must the notice be published?
Yes. Notice of the special resolution for a voluntary winding-up of the company must be published in the Government Gazette, Iris Oifigiuil within 14 days of the meeting in accordance with Section 592 of the Companies Act, 2014
All statutory documents must be completed and filed in the Companies Registration Office.
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Partner – Dillon Eustace Solicitors
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Chrome Capital Ltd.