Members’ Voluntary Liquidation: Understanding Disbursement

What are disbursements in a Members' Voluntary Liquidation (MVL) process?Disbursements play a crucial role in the process of a Members’ Voluntary Liquidation (MVL).

Apart from the professional fees charged by the insolvency practitioner, disbursements encompass the necessary expenses incurred throughout the liquidation procedure.

These expenses primarily consist of third-party costs, such as obtaining a statutory bond and publishing advertisement notices in the Gazette.

It is important to note that the responsibility for covering these disbursements falls upon the directors of the company undergoing a solvent liquidation

What are disbursements in a Members’ Voluntary Liquidation (MVL) process?

When opting for a Members’ Voluntary Liquidation (MVL) for your company, the primary cost to consider will be the fees charged by the appointed liquidator for overseeing the entire process. The exact amount of these fees can vary depending on various factors, including the complexity of the case and the presence of outstanding creditors.

It is advisable to engage in negotiations with your chosen insolvency practitioner to establish a fixed fee arrangement in advance, ensuring clarity regarding the expected costs.

Alongside the solvent liquidation fee, there will also be additional expenses known as disbursements, which encompass smaller miscellaneous costs that arise during the liquidation process.

What are disbursements?

Disbursements refer to the ancillary expenses incurred during the course of a specific process or transaction. In the context of insolvency and Members’ Voluntary Liquidation (MVL), disbursements are the additional costs that arise apart from the professional fees charged by the insolvency practitioner.

These expenses typically involve third-party costs that are essential to facilitate the liquidation process effectively. Examples of disbursements in an MVL may include fees for obtaining a statutory bond, expenses for publishing advertisement notices in the Gazette, and any other necessary outlays that arise during the liquidation proceedings.

It is important to note that these disbursements are typically the responsibility of the directors of the company undergoing any type of insolvency process and should be considered alongside the main liquidation fee when assessing the overall costs involved.

What sort of disbursements may be incurred during an MVL

As part of the seamless transition into a Members’ Voluntary Liquidation (MVL), the capable hands of the appointed insolvency practitioner take control of the company, its valuable retained profits, and other assets. To ensure utmost protection, shareholders are encouraged to secure a statutory bond, an indispensable safety net.

A statutory bond acts as a comprehensive insurance policy, assuring the safeguarding of your company’s capital while it is under the liquidator’s care. This invaluable shield offers reassurance in the unlikely event of any malpractice occurring. Compliance with legal requirements dictates that a statutory bond must be obtained promptly upon the appointment of an insolvency practitioner for a solvent liquidation.

The cost of obtaining this vital protection is based on a flexible sliding scale, adapted to suit the asset level of your company. For smaller enterprises, this fee can begin as low as £40, providing affordable peace of mind. Meanwhile, companies with substantial assets and millions of pounds to distribute can expect a more comprehensive package, with costs extending upwards of £600.

When will disbursements need to be paid?

Upon enlisting the services of an insolvency practitioner, you may be requested to endorse an indemnity agreement to safeguard against any unforeseen claims by creditors. Subsequently, a substantial portion of the company’s assets, typically consisting of cash reserves, will be distributed among the shareholders. However, a portion of these assets will be retained by the insolvency practitioner until the conclusion of the liquidation process.

The retained amount serves as a provision to cover the liquidator’s fees and any outstanding disbursements once the formalities of liquidation are finalised.

Following the settlement of these expenses, should there be any surplus funds remaining under the liquidator’s custody, they will be fairly apportioned among the shareholders.

Subsequently, with the distribution complete, the company will undergo official dissolution, marking the conclusive end of its operations.


In summary, directors who intend to pursue a Members’ Voluntary Liquidation must bear in mind the significance of disbursements and their responsibility for covering these additional costs. It is crucial to consider these expenses alongside the liquidator’s fees when assessing the financial implications of an MVL.

To gain a comprehensive understanding of the process and receive tailored guidance, I encourage you to complete our online enquiry form.

Our team of experts is ready to provide you with the necessary information and support to navigate the MVL process smoothly and effectively. Take the first step towards a successful liquidation by submitting your enquiry today.

Steve Jones Profile
Insolvency & Restructuring Expert at Business Insolvency Helpline

With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.