When a company has come to end of its useful life it should be wound up.  It may no longer be needed because:

• Its business has been closed down or sold and the company is no longer trading,
• It was used in a particular transaction that has been completed,
• It holds an asset that would be better held directly by its parent company or shareholder(s), or
• It was acquired as part of a purchase of a business and is not needed by the current owners.

If the company is not wound up then the directors will continue to have to comply with their duties as directors, including preparing and filing accounts, making returns to Companies House, and all other requirements of the Companies Act 2006.  Once the company is placed into liquidation the burden on the directors will be lifted and any assets can be returned to the shareholder(s).

Also the longer an inactive company is kept, the greater the chances that any long forgotten issues may resurface which will have to be dealt with by the directors.  By placing the company into MVL these issues will either be brought to a head so that they can be dealt with by the liquidator in an orderly and controlled manner, or, if no claim made against the company, then the assets of the company can be distributed to the shareholder(s) free of any risk that future claimants may try to claw back these assets.