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Corporate Recovery & Restructuring

Members’ Voluntary Liquidation (“MVL”)

A members’ voluntary liquidation (MVL) can only be instigated when a company is solvent and has sufficient funds to meet its financial obligations including the winding up expenses. A liquidator will be nominated by the board of director and appointed by the shareholders to wind up the company’s affairs. Necessary notifications required under the Companies Act 2016 will be lodged with the SSM and the Official Receiver. The assets of the company will be realised and full payment to creditors will be made. Any surplus of funds thereafter will be returned to the shareholders. The entire members’ voluntary liquidation process may take about 1 to 2 years to complete and it very much depends on the receipt of official clearance from the relevant authorities.

Causes of Members’ Voluntary Liquidation

When a company has achieved all of its objectives or the reason to remain open is no longer valid. The members may then decide to wind up the company by selling all of its assets and distributing any surplus after payment of liabilities to the shareholders. It can also be used to reorganize a group of companies, such as if a subsidiary company is no longer required or non-performing or has served its purpose. Whatever the objective, by proceeding with a members’ voluntary liquidation, the directors are able to wind-down the company in the most efficient manner possible.

What is The Distinction Between an MVL and a CVL?

CVL occurs when the directors of an insolvent company choose to liquidate the company voluntarily rather than waiting for a compulsory liquidation. While MVL is whereby a solvent company chooses to cease its operations, wind-up the company and returning surplus fund (if any) to the shareholders.

Impacts of Members’ Voluntary Winding Up

The main advantage of liquidating a company through a members’ voluntary liquidation is the ability to return the surplus fund to shareholders upon realisation of company’s assets. Once the liquidator has obtained clearance from the relevant authorities and ensured that there are no further claims from any other creditors, the appointed liquidator will take steps to close the case. Upon the final meeting of the company, the process of members’ voluntary winding up will come to an end, relevant documents will be lodged and the company will be deemed dissolved.

How Bizboard Can Help?

It is essential to ensure that proper closure of a company is carried out to give you a peace of mind. Reach out to our team of professionals in corporate recovery and restructuring if you are considering the initiation of the voluntary liquidation process. Our team will work with you throughout the process, ensuring the best possible outcome for your case.

Interested in Our Corporate Recovery & Restructuring Services?

Are you contemplating in taking actions to recover your debts? Or are you facing any issues in recovering your debts (or having difficulties in servicing your debt obligations), or is your company at risk of insolvency trading? Be in touch with us for a free and no obligation discussion on how we can assist you on recovery and restructuring matters.

Biztalk: Corporate Recovery Series #9 What is Members’ Voluntary Liquidation?

    Members' Voluntary Liquidation Malaysia

    What is Members’ Voluntary Liquidation or MVL in short? Members’ Voluntary Liquidation is a formal liquidation process whereby solvent companies would be wound-up and assets are realised and distributed to its shareholders.

    Prior to commencement

    The company’s accounts and records must be up to date.

    The directors would need to assess if the company would be able to pay all its debts (current and future/potential liabilities) within a period not exceeding 12 months and make a solvency declaration. The declaration of solvency together with a statement of assets and liabilities shall be lodged with the authority prior to calling of members meeting.

    The declaration of solvency shall not be taken lightly as directors whom makes a declaration without having reasonable grounds commit an offence and be liable for imprisonment not exceeding 5 years or a fine not exceeding 3 million ringgit or both upon convicted.

    A members meeting will then be called to pass special resolutions to voluntarily wind-up the company.

    Commencement of winding-up

    Upon passing of resolutions and filing of necessary documents, the company will then be placed in a Members’ Voluntary Liquidation. The power of the directors ceased and the company will be placed in the hand of the Liquidator.

    How can Bizboard help?

    As a team of professional accountants, Bizboard work and liaise with various professionals such as legal advisors, financial institutions, government authorities and other related professionals to achieve the best possible solution and highest recovery for all stakeholders throughout the insolvency or restructuring process.

    Bizboard act as independent adviser to ensure the process is conducted in proper order and in accordance to the relevant laws and regulations. Our highly qualified team have worked throughout various cases in different industries and have an extensive knowledge of business and the impact on stakeholders when a company faces financial distress.

    Talk to us to know more.

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