Members' Voluntary Liquidation (MVL): how it works

An MVL is the formal way to close a solvent company and distribute what is left to its shareholders. Here is the process and where the Declaration of Solvency fits.

What is a Members' Voluntary Liquidation?

A Members' Voluntary Liquidation is a way of formally winding up a company that can pay all of its debts. It is used by solvent companies, often when the owners want to retire, the company has finished trading, or a group is being reorganised. Because the company is solvent, the process is controlled by the shareholders rather than its creditors.

An MVL is often chosen for tax reasons, as distributions to shareholders in a liquidation are usually treated as capital rather than income. Whether that is the right route depends on your circumstances and is a question for your accountant or tax adviser.

Who is involved

The directors, who make the Declaration of Solvency.
The shareholders, who pass the resolution to wind the company up.
A licensed insolvency practitioner, who must be appointed as liquidator to carry out the MVL.
A solicitor or commissioner for oaths, who witnesses the Declaration of Solvency.

The typical steps

The directors review the company's finances and make a Declaration of Solvency confirming the company can pay its debts in full within 12 months.
The declaration is sworn before a solicitor or commissioner for oaths.
The shareholders meet and pass a resolution to wind the company up.
Notice of the declaration is filed at Companies House on Form LIQ01, and the resolution is filed too.
A licensed insolvency practitioner is appointed as liquidator.
The liquidator settles any liabilities, realises the assets, and distributes the balance to shareholders.
The company is finally dissolved.

Where the Declaration of Solvency fits

The Declaration of Solvency is the gateway to the whole process: without it, the company cannot be wound up as solvent. It must be made within the five weeks before the winding-up resolution and filed at Companies House within 15 days afterwards, so directors usually arrange the witnessing appointment in good time.

FastDec can arrange the witnessing of your Declaration of Solvency by video, but we are not insolvency practitioners. You will still need to appoint a licensed insolvency practitioner to act as liquidator for the MVL itself.

How FastDec helps

FastDec handles one specific, time-sensitive step: getting your Declaration of Solvency witnessed. We arrange a short remote video appointment with a UK solicitor for a fixed fee of £125, normally available the same day, and return the completed document by email so you can file it and pass it to your liquidator.

Frequently asked questions

Do I need an insolvency practitioner for an MVL?

Yes. An MVL must be carried out by a licensed insolvency practitioner appointed as liquidator. FastDec only arranges the witnessing of the Declaration of Solvency; we do not act as liquidator.

Is an MVL only for companies that have stopped trading?

It is for solvent companies, which are often ones that have finished trading or are being reorganised, but the key requirement is that the company can pay its debts in full within 12 months.

How does the Declaration of Solvency relate to the MVL?

It is the first formal step. The directors must make and swear the declaration before the shareholders pass the winding-up resolution, and notice of it is filed at Companies House on Form LIQ01.

Can FastDec do the whole MVL for me?

No. FastDec arranges the remote witnessing of the Declaration of Solvency only. The liquidation itself is handled by a licensed insolvency practitioner.

Online Statutory Declarations