Defensible asset and goodwill values for a solvent company wind-up.

A members' voluntary liquidation (MVL) valuation establishes the market value of the assets, goodwill and shareholdings a solvent company distributes to its members when it is wound up — either as cash after the assets are realised, or in specie by transferring the assets themselves. Oliver Group prepares independent, evidence-led valuations that give the registered liquidator and the company's accountant defensible figures for the final distribution, distinguishing going-concern value from orderly-realisation value and documenting the market values on which the CGT, section 47 deemed-dividend and Division 7A consequences of the wind-up turn. We prepare the valuation evidence only — we are not a registered liquidator or a registered tax agent, and the insolvency and tax questions are matters for your adviser.

When an MVL or deregistration valuation is required

A members' voluntary liquidation is the formal, solvent way to close a company: the directors sign a declaration of solvency under section 494 of the Corporations Act 2001 stating the company can pay its debts in full within twelve months, the members pass a special resolution to wind up, and a registered liquidator is appointed to realise the assets, settle liabilities and distribute what remains. It is distinct from a creditors' voluntary liquidation, which is for insolvent companies, and from voluntary deregistration under section 601AA — the low-cost ASIC route available only where, among other conditions, the company has ceased trading, has no outstanding liabilities and its assets are worth less than $1,000. That $1,000 asset threshold is itself a valuation question: if the company's remaining assets — plant, intellectual property, an investment portfolio, retained goodwill — are worth more than $1,000, deregistration is not available and the assets must either be distributed down first or the company wound up through an MVL. A valuation is required when the liquidator needs a defensible basis for a cash or in-specie distribution, when the accountant needs market values to work out the CGT and deemed-dividend consequences, when assets are being transferred to shareholders rather than sold to a third party, or when the wind-up needs to establish whether the deregistration threshold is met at all.

Going-concern value versus orderly-realisation value

The single most important decision in a wind-up valuation is the premise of value, because it can move the number by a wide margin. Going-concern value assumes the business keeps trading — its assets are worth what they generate as a working whole, and that value includes goodwill. Orderly-realisation value assumes the opposite: the business stops, and the assets are sold individually over a reasonable marketing period, so plant fetches second-hand value, work in progress may not convert, and goodwill that depended on the business continuing often falls away to little or nothing. A members' voluntary liquidation is solvent, so — unlike an insolvent fire sale — there is time to run an orderly process rather than a forced one, and orderly-realisation value, not distressed liquidation value, is usually the right basis. But the premise has to match what actually happens to each asset. Where a shareholder is taking the trading business intact and will keep running it, the going-concern market value of that business is the relevant figure; where equipment and stock are simply being sold off, orderly-realisation value applies. A report that applies one premise across the board, without asking what becomes of each asset, is the kind of number a reviewer unpicks. We state the basis of value adopted for each asset, explain why it fits the transaction, and document the evidence behind it.

Valuing the assets, goodwill and shares for the distribution

A liquidator can distribute a company's surplus as cash — after selling the assets and collecting the proceeds — or in specie, by transferring the assets themselves to the members. In-specie distributions are common where the family wants to keep a property, an investment parcel or the trading business rather than sell it, and they carry a valuation burden precisely because no arm's length sale sets the price: the market value has to be established independently. The report typically covers the assets whose value drives the distribution and its tax treatment.

• ·Real property, plant, equipment and motor vehicles at the basis (going-concern or orderly-realisation) that matches their fate in the wind-up
• ·Goodwill and other intangibles — tested for whether any transferable value survives the business ceasing, rather than assumed
• ·Trading stock, work in progress and debtors at realisable rather than book value
• ·Shares, units and investments, including interests in related private entities
• ·Intellectual property, domain names, brands and customer contracts being transferred in specie
• ·The members' shareholdings themselves, where the capital proceeds on cancellation of the shares need to be evidenced

The tax the distribution triggers — and where your valuation fits

A liquidator's distribution is not a single, uniform payment for tax purposes, and every part of how it is characterised depends on market value — which is exactly why the accountant needs defensible figures before the final distribution is made. Under section 47(1) of the ITAA 1936, amounts a liquidator distributes to shareholders are deemed to be dividends to the extent they represent income derived by the company, and section 47(1A) extends that to net capital gains the company makes on realising its assets — so the gain crystallised on selling or transferring an appreciated asset can flow to shareholders as an assessable, potentially frankable, deemed dividend. The balance is a return of capital that feeds into the shareholder's CGT position: when the shares are finally cancelled on deregistration, CGT event C2 happens, with the capital proceeds being the distributions that were not deemed dividends. Where the shares are pre-CGT but the company holds post-CGT property, CGT event K6 can apply. And Division 7A sits over any in-specie transfer to a shareholder or associate: transferring an asset for less than its market value can be treated as a payment under section 109C, measured as market value less the consideration given, so an under-valued transfer is the fast way to a deemed dividend nobody intended. Small business CGT concessions under Division 152 may also be in reach on the disposal of active assets, which turns on tests like the $6 million maximum net asset value threshold. We do not advise on any of this — it is your accountant's work — but we supply the market values that decide how much is a deemed dividend, how much is capital proceeds, and whether an in-specie transfer is exposed under Division 7A.

Coordinating with your liquidator and accountant

A wind-up valuation only works if it answers the questions the liquidator and the accountant actually have to make decisions on, so we scope the engagement with them from the outset: the effective date or dates, the assets in scope, the premise of value for each, and the standard of documentation the file needs. The registered liquidator relies on the figures to justify the distribution to members and to record it properly; the accountant relies on them to prepare the company's final return, the shareholders' CGT calculations and the section 47 apportionment. Where a distribution or transfer has already happened, we can value at the relevant historical date. Critically, we take no referral fee or commission from your accountant or liquidator, and we never pay for a referral — being paid by the adviser who then relies on our number would compromise the independence that makes the number worth having. Our reports state the basis of value, the methodology, the adjustments and the evidence, carry an independence statement and a senior reviewer's sign-off, and are prepared to IVS 104, APES 225 and the ATO's market valuation guidance, so the working file stands up if the ATO or a member later tests it.

Which Oliver Group tier fits an MVL engagement

A single, uncomplicated asset — one property to transfer in specie, or a small parcel of plant to value for the deregistration threshold — often sits at the Essential tier (from $1,495 + GST, 10–14 business days), and where you only need an early sense of the numbers before committing to the wind-up, an Indicative Snapshot from $990 + GST gives a defensible range without the full report. Most MVL engagements sit at the Comprehensive tier (from $3,995 + GST, 15–25 business days), which suits a solvent company distributing a mix of assets and goodwill where the going-concern-versus-orderly-realisation call and the deemed-dividend apportionment do real work. Where the figures will be examined — related-party in-specie transfers, small business CGT concession claims, or a wind-up the ATO is likely to review — the Defensible Valuation File (from $8,995 + GST, 25–35 business days) is the right level, and matters turning on a supportable range of outcomes can be scoped as a Valuation Range & Scenario Review (from $12,995 + GST). Valuing at an additional historical date is $495 per date, additional entities are $750 each, and rush turnaround is available at +30%, subject to capacity. Every fee is fixed in writing at engagement, never contingent on the values we conclude.