A members voluntary liquidation procedure can be applied where the directors/shareholders of the company decide to close the company. A members voluntary liquidation [MVL] applies where a company is solvent and is able to pay off its debts.
The reasons for seeking a members voluntary liquidation are varied but are common where a company has run its course or where the directors wish to retire.
The advantages of choosing a members voluntary liquidation are the significant tax savings that can be achieved. With a MVL, surplus funds are subject to the much lower Capital Gains Tax [currently 30%] and not the higher rates for income tax/USC/PRSI which can be as high as 55%.
Members Voluntary Liquidation Procedure
The process for a members voluntary liquidation are:
- The directors place the company in a MVL, making a statutory declaration of solvency
- Declaration is sent to all shareholders, together with a notice of a meeting of shareholders, during which 75% of shareholders must vote in favour of the MVL for it to continue
- The company ceases to trade and the liquidators duties and procedures come into effect
Liquidators Role in Members Voluntary Liquidation
- take possession of the company’s property, including its books and records;
- list the people who are owed money and how much they are owed;
- list the people (if any) who must contribute to the company’s assets on its winding up and how much they have to pay;
- investigate the company’s affairs;
- sell the company’s assets, accounting for capital gains tax (CGT);
- pay the company’s debts; and
- give any remaining money to the members in line with their entitlements
The above information for members voluntary liquidation and procedures is intended as a guideline only. We would always recommend that you seek professional liquidation advice as early as possible when considering a members voluntary liquidation.
Closedforbusiness.ie offer experienced liquidation specialists familiar with the process of members voluntary liquidation in Ireland. Our services are both professional and cost effective ensuring liquidation costs are kept to a minimum and maximum funds returned to the directors/shareholders of the business.