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Members' Voluntary Liquidation: How long does the process take?
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What is the process for an MVL?
The liquidation of a solvent company by way of a Members' Voluntary Liquidation is handled in full by a licensed insolvency practitioner. They will identify company assets, repay any outstanding creditors, before distributing the remaining funds to shareholders. The company will then be dissolved at Companies House and will cease to exist as a legal entity.
If you're considering the option of entering into a Members' Voluntary Liquidation (MVL) process to close a company and extract the cash tied up inside it, 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:
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- To begin the process directors must send a sworn declaration of solvency to the Registrar of Companies stating that they have reviewed their finances and have determined that they will be able to repay all existing and contingent debts (including interest) within a period of no more than 12 months.
- Within 5 weeks of swearing 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.
- Within 15 days of being passed the resolution must lodged with the Registrar at Companies House.
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- Usually the shareholders of the company should receive approximately 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 MVL timeline that applies to all companies.
The end of the Members' Voluntary Liquidation (MVL) procedure is marked by the 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.
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If you have any questions about the MVL process feel free to ask one of our experts online or call us for a free phone consultation. We have an extensive network of 100+ offices offering confidential director support across the UK.
Further Reading on Members' Voluntary Liquidation: Timeline, Process, and Procedure
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