Member’s Voluntary Liquidation (“MVL”)

An MVL is a legal process to formally wind-up a solvent company’s affairs. The company’s solvency is defined by its ability to pay its debts in full, together with interest, within a period of twelve months, from the commencement of the winding-up.

Why is an MVL used?

An MVL is typically used where a company has come to the end of its natural life, where reorganisations have occurred resulting in dormant entities, or it can also be used as part of a restructuring process. An MVL effectively brings the company to a formal end and distributes any remaining assets through a cash or an ‘in specie’ distribution to its Shareholder(s)/Member(s).

There are a few reasons as to why Shareholders and Directors may propose an MVL, such as:

Business owners may wish to retire and may have nobody to pass the company onto.
The company may have filled it purpose.
There are growing dormancy costs, and it is not financially viable to keep the entity active.
The distribution of assets to Shareholder’s without any Capital Gains tax.
The company may be redundant or unnecessary, due to external changes.
Much more.

In closing an entity, via an MVL, there is peace of mind as a Liquidator is appointed to tend to a company’s affairs; identifying them, formally resolving them and leaving no outstanding matters. Allow our experienced Insolvency Practitioners and Liquidators to provide you with that peace of mind.

We take care of the detail and administrative burden, so you do not have to.

Procedure for Appointment.

To commence an MVL, the Directors must hold a quorate board meeting to determine its appropriate to wind-up the company and to confirm its solvency.

A Declaration of Solvency must then be prepared for all Directors, in which they set out the company’s assets and liabilities and confirm its ability to settle all debts within the 12-month period. This is sworn before an independent Justice of the Peace, Commissioner for Oaths, and Notary Public. At RSM, we are able to assist you with every step of this process, including arranging for the above at no extra cost.

The company is wound up voluntarily once shareholders pass a special resolution at a Shareholders’ meeting, following the required notice period (unless validly waived).

Once appointed, we take responsibility for all statutory, filing, and advertising requirements. Creditors (if any) are formally invited to submit claims, with a minimum notice period of 28 days. We review, agree, and settle all valid claims in full. After creditor matters are resolved, we will distribute remaining assets to shareholders, either in cash or in specie, in accordance with their entitlements. If the liquidation extends beyond 12 months, annual progress reports are prepared and filed.

Once all matters are concluded, a final account is issued to shareholders with a notice period to raise queries or objections. Following this, the final account is filed with the Registrar, and the company is formally dissolved three months later.

Ultimately, this process can be administratively burdensome with a total of 5 months of statutory waiting periods, but this is managed entirely by us. We handle the complexity, so you do not have to.

Global Reach

A key benefit of working with RSM Gibraltar is our extensive international network, which enables us to deliver effective cross‑border services supported by strong local knowledge. We are well equipped to manage a wide range of foreign assets and to assist with complex multi‑jurisdictional and cross‑creditor matters.

We also have significant experience with Spanish‑based assets, having successfully realised and distributed them on numerous occasions. In doing so, we work closely and efficiently alongside your Spanish legal advisors to ensure seamless coordination and optimal outcomes.