Members Voluntary Liquidation (MVL) is a process by which a company can be voluntarily wound up when it is solvent. To initiate an MVL, the company’s directors must make a declaration of solvency and pass a special resolution. The declaration must state that, after a thorough investigation, the directors believe the company can pay all its debts in full within 12 months of the liquidation’s start.
Declaration of Solvency & Liquidator Appointment
A majority of the directors must declare, after a detailed review, that the company is able to pay its debts within a year. This declaration must be made before the special resolution is passed. Within 30 days of the declaration, the members must pass a special resolution to wind up the company and appoint a liquidator. This resolution must be advertised within 14 days of passing.
Methods for Declaration of Solvency
The declaration of solvency can be drafted under two methods:
Summary Approval Procedure (s.207/579)
Requires submission of Declaration of Solvency (Form E1-SAP), a special resolution to wind up and appoint a liquidator (Form G1), and a Notice of Appointment of Liquidator (Form E2) with the Companies Registration Office (CRO). These forms have a €15 filing fee each.
Section 580 Procedure
Requires submission of Declaration of Solvency (Form E1-41), an ordinary resolution to wind up and appoint a liquidator (Form G2), and a Notice of Appointment of Liquidator (Form E2). Forms E1-41, G2, and E2 also have a €15 filing fee each.
Ongoing Requirements
Form E3
Liquidator’s account of dealings is required if the winding up lasts more than 12 months. If the liquidation period is less than 12 months, Form E3 is not required. For periods of exactly 12 months, Form E3 must be filed, with a €15 fee.
Form E4
Liquidator’s statement of account is necessary for each six-month period if the winding up exceeds 12 months. Form E4 is required for the first 12 months and each subsequent six-month period, with a €15 fee.
Form E6 and E5
Form E6 (Return of Final Winding Up Meeting) must be accompanied by Form E5 (full statement of account). Both forms have a €15 filing fee each.
Dissolution
The company will be deemed dissolved three months after the final documents (Forms E5 and E6) are registered. Before this, corporate tax clearance must be obtained from the Irish tax authorities in the form of a letter of no objection to ensure the dissolution process can be completed.
Contact Us Today
For expert guidance on Members Voluntary Liquidation and assistance with the necessary procedures, contact us today. Our team is here to ensure a smooth and compliant winding-up process for your company.
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