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Members' Voluntary Liquidation

A tax effective way to distribute funds to shareholders.

A Members’ Voluntary Liquidation (MVL) is a structured method for winding up a solvent company in Western Australia. It is initiated by the business’ shareholders once it has fulfilled its purpose, is no longer trading or is no longer needed within a broader corporate structure.

An MVL is only possible when the company is solvent – it must be able to pay all of its debts in full within 12 months of liquidation commencement. In an appropriate situation and when well executed, MVL enables an efficient winding up process with potential tax benefits and a clear return of remaining assets to shareholders.

When is an MVL Appropriate?

MVLs are best suited to situations where:

  • A business has ceased operations and there is no intention to trade again
  • Directors are retiring and wish to close the company in an orderly way
  • A corporate restructure is underway
  • A holding company or subsidiary has become redundant within a group structure
  • Shareholders wish to access retained profits or capital in a tax efficient manner

The MVL process is designed for transparency, finality and legal certainty. That’s why it is such a popular option amongst business owners looking for a responsible way to conclude their affairs.

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Our process

The MVL Process: What to Expect

The MVL process is defined under the Corporations Act 2001. While simpler than insolvent liquidation, it must still be carefully understood and treated with attention to detail:

1

Pre-liquidation planning

Engage a financial advisor to assess the company's solvency and prepare for the wind up. That should include finalising all tax obligations and financial statements.

2

Declaration of Solvency

A majority of directors must sign a formal declaration of solvency, committing the business to meeting its debts in full within 12 months. This must be done no more than five weeks after meeting to appoint a liquidator.

3

Shareholder resolution

Members pass a special resolution to initiate a members voluntary winding up and appoint a liquidator.

4

Liquidation process

A liquidator will take control of the company, dealing with remaining assets, settling liabilities and distributing surplus to shareholders.

5

Finalisation and deregistration

Once all affairs are settled, the liquidator lodges final reports with ASIC and the company is formally deregistered.

The MVL process can take several months depending on tax clearance requirements, asset complexity and other liquidation considerations.

Tax and Shareholder Considerations

An MVL can offer significant tax advantages. For example:
  • Pre-CGT assets (acquired before 20 September 1985) may be distributed without triggering capital gains tax
  • Certain pre-1997 reserves may be distributed as capital, not income
  • Final dividends or returns of capital may be structured to suit individual shareholder tax positions

It’s important to understand that these outcomes depend heavily on the company’s historical records, share register integrity and compliance with tax law. To develop the most effective approach, speak with one of our registered liquidators.

The Role of the Liquidator

Even in a voluntary liquidation, the appointed liquidator is responsible for a host of specific statutory duties:
  • Finalise outstanding liabilities, including any taxation obligations
  • Ensure all company records and ASIC lodgements are up to date
  • Handle asset liquidation and distributions to shareholders
  • Obtain tax clearance from the Australian Taxation Office (if required)
  • Prepare and lodge final reports before deregistration

At HLB Mann Judd, we promote a collaborative approach. Our team work closely with your existing advisors, accountants and legal counsel to ensure a smooth, efficient and compliance MVL process.

Arrange a Cost and Obligation Free Consultation with HLB Mann Judd Insolvency WA

We understand that winding up a company is a significant milestone. Our MVL services are designed to support a group restructure, the end of a family business and much more. We provide:
  • Clear guidance on all compliance obligations
  • Timely and respectful communication with directors and shareholders
  • Close collaboration with your existing professional advisors
  • Efficient management of asset distribution and finalisation
  • Full compliance with ASIC and ATO requirements
With extensive experience delivering Members’ Voluntary Liquidations in Western Australia, HLB Mann Judd provides peace of mind that the process will be handled correctly, without unnecessary delay or cost.
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To speak with us further regarding a MVL and whether it is appropriate in your situation, please contact us for a cost and obligation free consultation.

Alternatively, our team can facilitate:

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