Wind up your solvent company (MVL)

We will help you wind up your company in an orderly and tax-effective way when the business has run its course.

A members voluntary liquidation is the formal process for closing down a solvent company: one that can pay all its debts and has assets or accumulated profits to distribute to shareholders. It is the correct mechanism for business owners who have wound down trading, converted assets to cash, or want to extract the value of a profitable company in a tax-efficient way. The process involves specific statutory steps, a licensed liquidator, and careful timing to ensure distributions are made correctly and that the directors can stand behind the solvency declaration required to commence the winding up. We advise on whether an MVL is appropriate for your situation and guide you through every step.

What is a members voluntary liquidation and when does it apply?

A members voluntary liquidation (MVL) is a formal statutory process for winding up a solvent company, initiated by the shareholders. It requires the directors to make a declaration of solvency, confirming that the company can pay all its debts in full within a specified period. A registered liquidator is then appointed by the shareholders to realise the company’s assets, pay its liabilities, and distribute any surplus to shareholders. An MVL is commonly used when a business has ceased trading, when a corporate structure is no longer needed, or when shareholders wish to extract accumulated profits or other assets from the company in a controlled and tax-effective manner. The tax treatment of distributions made in an MVL can be significantly more favourable than other forms of distribution, which is a key reason the process is used even where deregistration might otherwise be available.

How is an MVL different from simply deregistering a company?

Deregistration through the Australian Securities and Investments Commission is a simpler administrative process suitable for companies with no assets and no liabilities. An MVL is appropriate when the company has assets to distribute to shareholders. The MVL process involves a licensed liquidator who formally realises assets, pays liabilities, and makes distributions. The tax treatment of distributions to shareholders under an MVL can be significantly more favourable than other forms of distribution, which is why MVLs are commonly used even when deregistration would technically be available.

What is a declaration of solvency and why does it matter?

Before an MVL can commence under the Corporations Act 2001 (Cth), the directors must sign a declaration of solvency, confirming on oath that the company is able to pay all its debts in full within a specified period. This is a serious legal document. If the company later fails to pay its debts in full, directors who signed the declaration may face personal liability. Before signing, directors should obtain advice on whether the declaration is appropriate given the company’s actual financial position.

How are distributions to shareholders taxed in an MVL?

The tax treatment of distributions in an MVL depends on the nature of the assets being distributed and the individual shareholder’s tax position. Capital distributions may be eligible for capital gains tax concessions, including the small business CGT concessions, which can significantly reduce or eliminate the tax payable. Tax advice specific to your circumstances should be obtained before the MVL commences, as the structure and timing of distributions can materially affect the outcome for each shareholder.

How long does an MVL take?

A straightforward MVL typically takes two to four months from the initial resolution to final deregistration, depending on how quickly the company’s assets can be realised and any outstanding tax matters resolved. More complex MVLs involving property, ongoing contractual arrangements, or unresolved tax issues can take longer. We work with the appointed liquidator to keep the process moving and minimise unnecessary delay.

Correct statutory process from the first resolution.

Tax-effective extraction of business value.

Directors protected throughout the process.

Closing a company correctly is as important as running it well.

An MVL done correctly protects the directors, extracts value for shareholders in a tax-effective way, and provides certainty that the company’s affairs are properly concluded. Done incorrectly, it creates ongoing exposure for those who signed the solvency declaration.

Winding down your company is not as simple as stopping trading.

Your company has run its course, but you cannot simply stop trading and walk away. The company has assets that need to be properly distributed, the directors need to stand behind a solvency declaration, and the tax treatment of any distributions depends on how the process is structured. Getting this wrong creates ongoing exposure for the directors and may cost shareholders significantly more tax than proper advice would have prevented.

We will advise on whether an MVL is appropriate for your situation.
We will manage the statutory process from the shareholders' resolution through to deregistration.
We will advise directors on the solvency declaration and their obligations during the process.
We will coordinate with your tax adviser to structure distributions in a tax-effective manner.

Your company has done its job and it is time to wind it up properly.

You have decided to close the business. The company has been trading profitably, but activity has wound down and the assets have been converted to cash. You know you cannot simply stop and walk away. You need to formally wind up the company, distribute the remaining value to shareholders, and make sure the directors are protected throughout the process. You are not certain of the correct steps or how to structure the distribution to minimise the tax payable.

What's included in your MVL service

Advice on whether an MVL is the appropriate winding-up mechanism.
Shareholders' resolution preparation.
Directors' solvency declaration advice and documentation.
Liquidator appointment coordination.
Tax structuring advice in conjunction with your tax adviser.
Final deregistration confirmation.

What goes wrong when companies are closed down without the right process?

Companies that are wound down without following the correct procedure create problems that can persist long after trading has ceased. Directors who sign a solvency declaration without proper advice, and whose company subsequently fails to pay a liability that was overlooked, can face personal liability for insolvent trading. Shareholders who receive distributions without proper structuring can face unexpected tax bills that significantly erode the value of what they receive. A company that is simply abandoned rather than formally wound up remains on the register, incurs ongoing annual review fees, and leaves the directors exposed to potential claims long after they believed the matter was concluded. These are all avoidable outcomes with the right advice at the outset.

Here is how we close your company with certainty and efficiency.

We start by reviewing the company’s financial position to confirm that an MVL is the right approach and that the directors can properly make the solvency declaration. We then prepare the required resolutions, coordinate the appointment of a licensed liquidator, and work with your tax adviser to structure distributions in the most effective way for each shareholder. Throughout the process, we keep the directors informed of their obligations and ensure the liquidator has everything needed to complete the winding up without unnecessary delay. When the process concludes, you have certainty that the company’s affairs are properly closed and that the directors have no residual exposure from the winding up.

Three steps to a clean company wind-up.

We manage the process so the directors and shareholders can move on.

Assess and prepare.

We review the company's financial position, advise on the appropriate mechanism, and prepare the directors' solvency declaration and shareholders' resolution to commence the MVL.

Appoint and distribute.

We coordinate the appointment of a licensed liquidator and work with your tax adviser to structure distributions to shareholders in the most tax-effective way.

Complete and deregister.

Once assets are distributed and all liabilities satisfied, we confirm that the winding up is complete and the company is ready for deregistration.

Corporate lawyers experienced in managing voluntary liquidations across a range of business types and structures.

We have guided business owners through the MVL process across a range of industries and company structures, from small family companies to holding entities with multiple subsidiaries. We understand that winding up a company you have built is not a purely administrative exercise: there are real decisions to be made about tax, director obligations, and the timing of distributions. We take the time to explain the directors’ obligations clearly, work with your accounting and tax advisers to maximise the value that reaches shareholders, and manage the process efficiently so it does not drag on longer than necessary. Our goal is a clean conclusion that leaves nothing unresolved.

We understand you want to know the cost, before we get started.

We will map out our process, from beginning to end, so you know what the journey will look like before you get started.

We will provide you with a clear and detailed Work Proposal covering each step along the way.

Our fair fees are all-inclusive. No hidden costs for telephone calls, emails, photocopying, couriers, or coffee.

Our great lawyer guarantee

We want to be part of your team over the long term. We achieve this by adhering to these core principles:

Take the time

We listen carefully to understand what you want to achieve. Then we thoroughly explain our advice and step you through the documents. You can be sure you know the full consequences.

Share our knowledge

We will pass on as much knowledge as we can, so you can make your own informed decisions. We want to make you truly independent.

Stick to our knitting

We only do what we're good at. You can be confident that we know what we're doing and don't pass on the cost of our learning.

Work as one team

Someone will always be available to answer your questions, or point you in the right direction. You will also benefit from a range of perspectives and experience.

Fair pricing

For advice and documents, we provide a fixed or capped quote so you don't take price risk. If you're in a dispute, we map out the process and costs so you know what to expect.

It's your show

We're not in this for our egos. We're in it for a front row seat to witness your success.

Ready to wind up your company properly and move on?

A members voluntary liquidation is the formal process for closing down a solvent company: one that can pay all its debts and has assets to distribute to shareholders. It is the preferred mechanism for business owners who have wound down trading, converted business assets to cash, or want to extract the value of a profitable company in a tax-efficient way. The process involves specific statutory steps, a licensed liquidator, and careful timing to ensure that distributions are made correctly and that the directors can stand behind the solvency declaration required to commence the process. We advise on whether an MVL is appropriate for your situation and guide you through every step.

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