Timeline Guide for a Members Voluntary Liquidation
If you're considering the option of entering into an MVL to close a company and extract its value in the form of cash distributed amongst the shareholders, then you're probably wondering how long the process will take overall and what to expect in the way of time frames. For this reason we have created the following members voluntary liquidation timeline guide:
How Long Does it Take to Initiate an MVL?
- To begin the process directors must send a statutory declaration of solvency to the Registrar of Companies stating that they have reviewed their finances and have determined that they will be able to feasibly repay all existing and contingent debts (including interest) within a period of no more than 12 months.
- Within 5 weeks of issuing the declaration of solvency the directors of the company must pass a resolution to officially begin the winding up process.
- Within 14 days of the resolution being passed an advert is placed in the Gazette and a creditors' meeting is held. Creditors must be notified at least one week before the meeting.
- Also, within 15 days the resolution must lodged with the Registrar.
How Long Until Funds are Distributed Amongst Shareholders?
- Usually the shareholders of the company should receive about 75% of the funds extracted from the company within about 3 months of entering into an MVL.
- Members should receive the remaining balance of the liquidation account as soon as HMRC clears the case, which usually takes about another 2 months.
- The exact time it takes until the proceeds of liquidation are distributed will depend on the speed at which your bank releases the funds to the liquidator, which usually takes about 2-6 weeks.
- Given the variable amount of time it takes for this step to take place it is not possible to schedule an exact members voluntary liquidation timetable that applies to all companies.
When Does Members Voluntary Liquidation End?
The end of the procedure is marked by the members voluntary liquidation final meeting held by the liquidator. The liquidator will send a notice of the final meeting to the London Gazette, and about three months later the company will be struck off the Registrar. However, the directors of the company may be able to restore the company via a Court order at any point within 6 years of dissolution.
If you have any questions about the members voluntary liquidation process feel free to ask one of our experts online or call us on 0800 231 6040 for a free phone consultation. We have an extensive network of 76 offices offering confidential director support across the UK.