Under Section 110 of the Insolvency Act 1986 one or more businesses of a company in MVL may be transferred to a new company, or companies, in return for shares in the new companies. The new shares are then distributed to the shareholders of the original company. This allows incompatible businesses or assets to be separated.

The reasons why the different businesses might be separated include;

• Different risk profiles,
• One business to be sold and another business or none business assets retained,
• Different shareholders have conflicting aspirations for the businesses and agree to go their separate ways.

In addition to the statutory requirements of placing the company into MVL, the section 110 scheme must be approved by a special resolution of the shareholders.  Any shareholder who does not approve the section 110 scheme may object to the liquidator with 7 days and require the liquidator to either abstain from carrying the scheme into effect or to purchase his interest in the company.  For this reason it is normal for the general meeting to approve the section 110 scheme to be held at least a week before the meeting to approve the liquidation.