Placing a company into MVL

Copyright © 2025 LexisNexis
Produced in partnership with Simon Hunter of Three Stone
Practice notes

Placing a company into MVL

Copyright © 2025 LexisNexis

Produced in partnership with Simon Hunter of Three Stone

Practice notes
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A members’ voluntary liquidation (MVL) occurs when a company is solvent and an orderly wind-up of the company is required. For further detail, see Practice Notes:

  1. •

    What is a members’ voluntary liquidation and when is it typically used?

  2. •

    MVL—the information and documents to be provided to the liquidator by the company

The process is initially instigated at a board meeting where the directors have formed the opinion that the company will be able to pay its debts in full, together with interest at the official rate within the period not exceeding 12 months from the commencement of the winding up.

A company may be wound up voluntarily under the control of its members only if a statutory declaration of solvency and a statement of the company's assets and liabilities (and the other matters set out in insolvency (England and Wales) Rules 2016, SI 2016/1024, r 5.1) have been made by a majority of the company’s directors, within the period of five weeks immediately preceding the passing of a resolution to wind it

Simon Hunter
Simon Hunter

Three Stone

Simon was called to the Bar in 2009 and practices in chancery and commercial law from Three Stone. His practice has a particular emphasis on insolvency and property, but takes in the full range of chancery and commercial work done in his chambers.

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Jurisdiction(s):
United Kingdom
Key definition:
Insolvency definition
What does Insolvency mean?

This can be defined by two alternative tests (Insolvency Act 1986, s 123):

• cash flow test: a company is solvent if it can pay its debts as they fall due, no matter what the state of its balance sheet (Re Patrick & Lyon Ltd [1933] Ch 786);

• balance sheet test: a company which can pay its debts as they fall due may be insolvent if, according to its balance sheet, liabilities (including contingent liabilities) exceed assets.

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