A Members’ Voluntary Liquidation (MVL) is a formal process used to wind up the affairs of a solvent company that is no longer required.

Common reasons for initiating an MVL include business succession, sale of enterprise, group restructuring, or to realise tax efficiencies for shareholders.

The process begins with the directors making a Declaration of Solvency, confirming that the company can pay all of its debts within 12 months. This is followed by a shareholder resolution to appoint a liquidator, who then undertakes the process of settling liabilities, realising assets, and distributing any surplus capital or retained profits to shareholders.

Once the liquidation is complete, the company is deregistered and ceases to exist.

MVLs are frequently recommended by tax and legal advisers because they:

• Allow for tax-effective distribution of capital and pre-CGT reserves,

• Enable the resolution of Division 7A loan accounts during liquidation,

• Permit allocation of remaining imputation credits via franked dividends,

• Eliminate future compliance costs (e.g. audit, ASIC fees),

• Protect against post-deregistration reinstatement risks that exist with simpler deregistration.

Importantly, unlike voluntary deregistration, once an MVL is completed, the company is permanently deregistered and typically cannot be reinstated—offering finality and protection against contingent claims.

Helios Advisory conducts MVLs with a focus on efficiency, statutory compliance, and transparent communication. While we are not tax advisers, we collaborate with clients' accountants and legal representatives to help ensure shareholders receive the most advantageous outcome available under current tax laws.