What is a Members’ Voluntary Liquidation?

A Members’ Voluntary Liquidation (MVL) is a voluntary form of liquidation commenced by the shareholders of a company that is solvent and so able to pay its debts. Once the company’s assets are sold and the debts and costs of the liquidation have been paid, the balance of monies available are distributed to the shareholders.
By a special resolution at a meeting of the shareholders of the company, the company can be placed into liquidation. It is not a requirement that the liquidator be a registered liquidator as the “liquidator” can be a lawyer or accountant and even an employee of the company.
A declaration of solvency is required to be completed and lodged with the Australian Securities & Investments Commission (ASIC). If at any time the liquidator forms the view that the company is insolvent, and so unable to pay its debts, then the liquidator must apply to the court for the company to be wound up, appoint a voluntary administrator or call a meeting of the company’s creditors with a view to proceed with a creditor’s voluntary liquidation of the company.
Upon payment of all creditors, costs and surplus funds to the shareholders, the business of the company is at an end and the filing of relevant documents with the ASIC completes the MVL process and winds up the company.
If your company needs liquidation advice, do not hesitate to call us to discuss the requirements and ramifications of the winding up process.