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Members Voluntary Liquidation (MVL)

The term is in close relation to another legal term: liquidation. Liquidation refers to a process during which a company is brought to an end, their assets and properties are sold, and the money gained is used to repay the company's debts. There are two forms of liquidation: one when creditors file a petition asking for liquidation, this is called compulsory or creditor's liquidation. The other type is when the shareholders of the company decide voluntarily to wind-up the affairs conducted by the company and dissolve it. This last type is called members' voluntary liquidation. In this latter case there are two options: either the shareholders will appoint a liquidator, or the creditors will appoint one during a creditor's meeting, but in this case the whole process might turn to a creditor's liquidation.