Members Voluntary Liquidation

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Members Voluntary Liquidation

Members Voluntary Liquidation is a liquidation in which the company is solvent and the company’s assets  are distributed to its members (i.e. shareholders).

For information on Turnaround, Schemes of Arrangement, Receivership, Examinership or Creditors Voluntary Liquidation please click on the following links:


Schemes of Arrangement



Creditors Voluntary Liquidation

A Members Voluntary Liquidation can provide significant tax advantages . A capital gain received on proceeds will only be taxed at 33%. If the surplus monies were taken out as salary, then those monies may be taxed at a much higher marginal tax rate. The CGT rate is nil (subject to limits) in respect of Early Retirement Relief.

A Members Voluntary Liquidation can be a pragmatic way to resolve a shareholders’ dispute.

To place a company into a Members Voluntary Liquidation, the directors must follow a Summary Approval Procedure as set out in the 2014 Companies Act.  The directors must complete a Declaration on a form E1-SAP. The Declaration summarises the company’s assets and liabilities. The directors state that the company will be able to pay all of its debts in full within 12 months of the commencement of the Members Voluntary Liquidation. There may be serious consequences for the directors if they swear a Declaration  which is inaccurate.

The Declaration must be:

  • Made in writing
  • By all or a majority of directors
  • At a meeting held not earlier than 30 days before the shareholders meeting
  • State the amount of current assets and liabilities
  • That the company will be able to pay its debts in full within 12 months of commencement of winding up
  • Accompanied by an auditors report stating that the declaration is not unreasonable
  • Appended to shareholders notice/resolution
  • Delivered to CRO within 14 days

Once the Declaration is completed, a copy of it must be sent to all shareholders.  At the shareholders meeting, a special resolution must be passed i.e. 75% of the shareholders voting must vote in favour of the resolution placing the company into a Members voluntary Liquidation.

Once the shareholders pass the resolution placing the company into liquidation the liquidator will advertise his/her appointment in Iris Oifigiuil.

A popular way to distribute certain assets to shareholders in  a members voluntary liquidation is to distribute them in specie i.e. in kind. Thus, freehold property may be transferred to shareholders directly. A significant advantage of in specie distributions is that no stamp duty is payable.

A major difference from a Members Voluntary Liquidation to a Creditors Voluntary Liquidation is that a MVL Liquidator does not have to submit a report to the  CEA

Between the date of the decision to liquidate and the appointment of the Liquidator, the Directors should undertake the following steps.

The best value way to carry out a members voluntary liquidation of a company is to realise all assets, pay all creditors and just hand over a bank account with the remaining monies to the liquidator.

We set out below some of the steps/issues that directors should consider in realising all assets to cash etc.

The position of the employees needs to be carefully considered. If there is  a Trade Union involved then it should be consulted. With the Covid Emergency we are now assisting Companies to hold Zoom calls to advise employees on their employee entitlements. For further information on employee entitlements  please click on the following link: employee entitlements.

The employees redundancy entitlements may be calculated using the online redundancy calculator at the Department of Employment Affairs and Social Protection.

Any staff mobile phones should be cancelled on the day they leave to avoid recurring rental and phone charges. Keys to the Company’s premises should also be collected and alarm codes changed. Employees should be allowed to collect personal possessions from their desks and lockers.

All property leases should be carefully reviewed to check for dilapidation clauses etc.

The  Company Pension Plan should be wound up before the Company is placed into a Members Voluntary Liquidation.

All assets of the Company should be sold. If selling IT equipment all data should be backed up first before the data on the equipment is erased.

VAT and PAYE returns should be brought up to date. The last pre-liquidation Corporation Tax return is generally submitted shortly after the Company is placed into a Members Voluntary Liquidation.

As Liquidators we can agree and pay Preferential Creditors and process Employee Entitlements.

We can also assist with the valuation and sale of subsidiaries and other assets.

We can also assist in developing strategies in maximising realisations from debtors. For further information on our Credit Management consultancy services please check out our sister web site

Benefits of a Members Voluntary Liquidation

  • Savings on ongoing audit and accounting costs
  • Savings in management time previously taken up with the preparation of financial information and tax returns
  • Reducing risk to the company and its directors by avoiding “corporate memory loss“. This can happen when a company is being inactively maintained
  • Often used as part of a corporate simplification process where a group wants to streamline its corporate structure
  • Members Voluntary Liquidation can be a very tax efficient method of distributing cash/ assets to shareholders
  • Averts the danger of an inactive company being involuntarily struck off which can result in the loss of a company’s limited liability protection. For further information on strike off please click on the following link: Strike Off
  • A MVL may be cheaper than having a Statutory Audit and paying late filing CRO fees.

Capital Gains Tax Retirement Relief

Capital gains tax retirement relief is a relief from capital gains tax (CGT) available to individuals who dispose of all or part of the ‘qualifying assets’ of their business. The qualifying assets could, for example, include business assets used in a trade (such as premises, goodwill or farming land) or family company shares.

CGT retirement relief can potentially reduce a CGT tax bill on the sale of such assets to zero, provided the sale satisfies certain conditions.

Qualifying conditions

The following qualifying conditions apply:

  • The disposal must be made by an individual (and not for example by a company).
  • The individual must be 55 or over. The amount of relief is restricted if the individual is older than 66.
  • The disposal must be of qualifying assets (e.g. business assets or family company shares).
  • The qualifying assets must have been held for a minimum period immediately prior to the disposal – normally 10 years.
  • When the disposal is of family company shares the individual must have been a working director for a minimum of 10 years up to the date of disposal, 5 of which were on a full time basis.

A company is defined as a family company when an individual holds either:

  • A minimum of 25% of the voting rights of the company, or
  • A minimum of 10% of the voting rights and his family, including him, holds a minimum of 75% of the voting rights of the company.


It should be noted that retirement (in the normal sense of the word) is not actually a condition of the relief. An individual could sell qualifying assets (e.g. the assets of his business or the shares of his family company) and claim CGT retirement relief (provided they fulfil the conditions) and then still continue to be actively involved in the business or remain a shareholder or director of the company.

Entrepreneur Relief

This relief gives a CGT rate of 10% on gains from the disposal of qualifying business assets. This is reduced from the normal rate of 33%.

There is a lifetime limit of €1 million on the gains that you can claim relief on. Only gains on disposals made on or after 1 January 2016 are counted in the limit.

The relief does not apply to disposals of:

  • shares (other than shares that qualify for relief under this section), securities or other assets held as investments
  • development land
  • assets on the disposal of which no chargeable gain would arise
  • assets personally owned outside a company, even where such assets are used by the company
  • goodwill which is disposed of to a connected company
  • shares or securities in a company where the individual remains connected with the company following the disposal.


How do you qualify for the relief?

You must have owned the business assets for a continuous period of three years. The three years must be in the five years immediately prior to the disposal. The business asset must be used for a qualifying business. In the case of shares, you must have owned at least 5% of the ordinary shares for a continuous period of three years. The three year period can be at any time prior to the disposal.

Qualifying business assets are:

  • shares held by an individual in a trading company
  • owned by a sole trader and used in their trade.

A qualifying business is a business other than the:

  • holding of securities or other assets as investments
  • holding of development land
  • development or letting of land.

Qualifying business operated by a company

Where a business is operated by a company you must have owned at least 5% of the ordinary shares in either:

  • the company
  • a holding company of a qualifying group.

You must have been a director or employee of the qualifying company or companies in a qualifying group. You must have:

  • spent no less than 50% of your time in the service of the company (or companies) in a managerial or technical capacity
  • served in that capacity for a continuous period of three years. The three years must be in the five years immediately prior to the disposal of the business assets.

Liquidations of Charities

Charities are generally Companies Limited by Guarantee. A practical issue that  we come across is that if the charity did not keep its shareholders register updated that it may be difficult to difficult to obtain a Quorum of shareholders to pass the necessary Liquidation resolutions.

Any charity going into liquidation must notify the Charities Regulator, who have published a useful guide. Please click here for the Guide.

Liquidations of Irish Collective Asset Management Vehicles

In the past 10 years, a tsunami of regulations have been released, such as Undertakings for Collective Investment in Transferable Securities (UCITS IV/V), Alternative Investment Fund Managers Directive (AIFMD), Markets in Financial Instruments Directive (MiFID II), European Union Securities Financing Transactions Regulation (SFTR) in Europe and Dodd Frank and the Foreign Account Tax Compliance Act (FATCA) in the US. We are experts in guiding fund managers through the web of legislation and regulations in order to wind up a fund.

The Irish Collective Asset Management Vehicle is governed by a simplified legislative regime under the Irish Collective Asset Management Vehicles Act 2015 and is distinct from the Irish Companies Act 2014. With the exception of the liquidation of an Irish Collective Asset Management Vehicle, the ICAV structure is not subject to Irish company law and accounting rules which apply to Irish Collective Investment Schemes (CIS) structured as a Public Limited Company (PLC). The authorisation and supervision of the ICAV IS carried out by the Central Bank. The liquidation procedures for ICAVs are straightforward, with similar Statutory forms being used as for Irish companies. The Companies Registration Office has no role in accepting filings made by Irish Collective Asset Management Vehicles: All filings are made with the Central Bank.

Given the benefits of Irish Collective Asset Management Vehicles, it is expected that such vehicles will dominate the fund management sector in Ireland.

The procedures to liquidate an Irish Collective Asset Management Vehicle as a Members Voluntary Liquidation similar to that of a company incorporated under the Companies Act 2014.   An Irish Collective Asset Management Vehicles is a corporate vehicle specifically developed for investment funds and is regulated by the Central Bank of Ireland. Like an investment company, an Irish Collective Asset Management Vehicle is a corporate entity that is governed by a board of directors and owned by its shareholders..

As authors of “The Practitioners’ Guide to Members Voluntary Liquidations“, we specialise in the area of Members Voluntary Liquidations, and we have streamlined procedures in place to expedite the completion of Members Voluntary Liquidations.

We provide free estimates/quotations for carrying out Members Voluntary Liquidations.

Our standard fee for MVL’s are as follows:

  1. €0 – €200,000                     Fee – €2,700 plus VAT
  2. €200,000 – €500,000        Fee – €3,700 plus VAT
  3. €500,000 – €750,000         Fee – €4,700 plus VAT
  4. €750,000 – €1,000,000      Fee – €5,700 plus VAT
  5. For cash in excess of €1 Million a tailored fee is provided.

Out of pocket expenses such as Iris Oifiguil and CRO amount to approx. €300 plus VAT per MVL.

The above guidelines for fees are on the basis that:

  1. All assets are converted to cash (we will provided an alternative quote if assets are to be distributed in specie etc.)
  2. All pre liquidation tax returns are prepared (and submitted) up to date of liquidation by the company’s existing tax advisors.
  3. Once all returns are brought up to the date of liquidation the Company should de register under all tax headings.
  4. We will distribute 90% of the monies “day one” and will hold the 10% balance pending clearance from the Revenue Commissioners.

We are able to prepare all of the necessary documents for a Members Voluntary Liquidation  within 24 hours.

For further information, or a free fee quotation, please contact  Tom Murray, Anthony Glennon or Eoin Massey on 01 661 4066 or

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