What is a Member’s Voluntary Liquidation?
A Members’ Voluntary Liquidation is a process detailed in the Corporations Act 2001 which allows a solvent company’s affairs to be wound-up. A liquidator is appointed to sell the assets of the company, to pay all creditors and then distribute any surplus assets to the shareholders. In practice, we usually recommend that the affairs of a company be wound down by the directors prior to liquidation so as to save on liquidator’s fees.
Benefits of a Member’s Voluntary Liquidation
Where there are tax benefits (pre-CGT profits or SBE concessions);
When a company has sold a Pre-CGT Asset or meets the Small Business Entity criteria, a liquidator can make a distribution of funds to company members with reduced tax – sometimes tax free! See our pages on Pre-CGT and SBE for more details
Where you want the company to be difficult to reinstate
Did the company operate in a high-risk industry, for example, where public liability claims sometimes arise? A Members Voluntary Liquidation offers a higher level of protection from reinstatement than simple deregistration.
For corporate simplification purposes
Listed companies and multinationals often prefer the added certainty of a Members Voluntary Liquidation over simple deregistration
The Process
Appointing a Liquidator (Day 1)
Directors and Members sign easy to follow pro forma meeting minutes agreeing to put the company into liquidation.
Notifications and Lodgements (2 months)
Tax Accountant to make outstanding lodgements & pay any debt from available funds;
We request a Tax Clearance Notice from the ATO. Usually takes 1 month based on the ATO’s 28 day turnaround.
We advertise the appointment on the Insolvency Notices Website. We are required to wait 14 days to make sure no creditors come forward.
Final Report to Members (2 weeks)
We issue a report to members informing them the liquidation is complete.
Deregistration (3 Months)
The regulator will deregister the company 3 months from the date the End of Administration Return is lodged
Speak to an expert today.
OUR
Team
Brad Vincent
SENIOR CLIENT ADVISOR
After 15 years of being an advisor, Brad has developed an excellent understanding of the legal and practical issues facing a director of an insolvent company – it is rare for a director to throw a new situation at Brad.
John Gibbons
PARTNER – DISSOLVE
John has more than 30 years specialist experience in corporate recovery, restructuring and reorganisation.
Alivia Putri
SENIOR INSOLVENCY ACCOUNTANT
Alivia is a senior insolvency accountant and analyst at Dissolve. Since joining the firm, Alivia has developed strong hands-on experience in Members’ Voluntary Liquidations (MVL), Creditors’ Voluntary Liquidations (CVL), statutory reporting, creditor communications, financial investigations, asset realisations and appointment administration.
Fees – Liquidator’s Remuneration
The cost of a Members’ Voluntary Liquidation varies according to a number of factors, particularly the size and complexity of the tax issues, the programme of asset realisation and the nature of the assets.
At Dissolve, by focusing on a single, highly specialised service area, we are able to bring to bear our experience and professional judgement in a systematised way and provide a streamlined and timely service. Because of our focus, we are able to provide our service at a fee often half that of other service providers. Where a group of companies is involved, considerable efficiencies are possible and a low fee per company can be achieved.
We like to quote on each job specifically, but as policy our fee for a Members Voluntary Liquidation will be half of any quote you obtain from a Big4 Accounting firm.
FAQ
What is a Member's Voluntary Liquidation (MVL)?
An MVL is the process used to formally wind up a solvent company. It’s initiated by directors and shareholders — not creditors — and is primarily used to distribute past profits to shareholders in a tax-effective way.
What's the difference between an MVL and company deregistration?
Deregistration is faster and cheaper, but it’s only available when all members agree, the company isn’t operating, and its assets are worth less than $1,000 with no outstanding liabilities. An MVL is the better option when there are meaningful assets to distribute, high-risk industry exposure, or franking credits at stake.
Can any company use an MVL?
No — only solvent companies qualify. Directors must be able to sign a Declaration of Solvency, confirming the company can pay all its debts (including tax) within 12 months. If it can’t, creditors’ voluntary liquidation is the path instead.
What are the main tax benefits of an MVL?
When a liquidator makes the final distribution, capital profits are treated as proceeds from the cancellation of shares — not a dividend. This can unlock Small Business CGT concessions or preserve the tax-free status of pre-CGT asset gains, which would otherwise be lost if the company simply paid a dividend to shareholders.
How long does an MVL take?
The process involves multiple steps — director meetings, notice periods (21 days unless 95% of shareholders consent to short notice), lodgements, and a final meeting. Dissolve states they typically wrap up well before the 12-month mark that would trigger an Annual Meeting requirement.
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