A Distribution In Specie Is A Means Of Distributing The Assets.
It is common practice to use Distributions In Specie in a Members Voluntary Liquidation (MVL) as a means of distribution of the assets to the shareholders. This is a procedure authorised to be undertaken by a Liquidator under the provision of the Insolvency Act 1986.
A Members Voluntary Liquidation is a solvent liquidation and one of the ways to liquidate your company when the creditors can anticipate and ought to obtain 100 pence in the £. An MVL can be undertaken entirely online.
An MVL is a procedure that is not strictly an insolvency procedure because the company is solvent and the creditors will be paid in full. It is a procedure that enables a business’ trade to be concluded and for a distribution to be provided to the shareholders otherwise known as the members. It has to be undertaken by a Licensed Insolvency Practitioner.
An Overdrawn Director’s Loan Account is money that is owed by a Director to the company. It is in effect no different to being overdrawn at a bank but instead of owing the bank money, the Director owes the company.
It is therefore an asset of the company that can be distributed to the shareholders in a Members Voluntary Liquidation, just like with any other asset available.
This is a particularly common procedure to use when the Director of a company is also its main shareholder. It enables the Director in effect not need to repay the overdrawn director’s loan account back to the company.
For a free no obligation chat about any of the matters detailed above, please do get in touch for help. An expert will call you back or if you prefer exchange emails.
We can explore your situation and consider the best way to help you and your business needs. You can call us 020 3925 3613 or fill in the form below and will get back to you quickly. We Know Insolvency Inside Out.
If you have any questions in relation to What Is A Distribution In Specie? then contact us as soon as possible for advice. Oliver Elliot offers a fresh approach to insolvency and the liquidation of a company by offering specialist advice and services across a wide range of insolvency procedures.
This page is not legal advice and is not to be relied upon as such. This article What Is A Distribution In Specie? is provided for information purposes only. You should take independent advice on the facts of your case. No liability is accepted for reliance upon this post.
Oliver Elliot is a specialist firm set up by Elliot Green, who is a Licensed Insolvency Practitioner and Chartered Accountant. We know insolvency inside out. We offer a vast variety of services and can accommodate you no matter what industry you are in and what insolvency services you require. Where there’s Oliver Elliot there’s a way.
© 2026 Oliver Elliot. All Rights Reserved. Registered in England and Wales. Company Number: 11746967
