HomeFWJ TakeawayResourcesMembers voluntary liquidation process

A members voluntary liquidation is a voluntary liquidation process brought by the members of a company that is solvent who wish to liquidate a company.

It is a way of bringing to an end a solvent company in the most effective way possible, using the liquidation process. A members voluntary liquidation is typically used by a company which has been trading and has assets but is confident that they can pay their creditors in fully, but wish to go into liquidation and bring an end to the company.

How to commence a members voluntary liquidation

A members voluntary liquidation will be commenced by a special resolution of the company who decide to liquidate my company. The company who wishes to go into liquidation will, in a general meeting, appoint a liquidator.

Declaration of solvency

The directors must have formed the view that the company will be able to pay its debts in full together with interest at the official rate within no later than 12 months from the commencement of the voluntary liquidation. The majority of the company’s directors must make a declaration of solvency stating this within 5 weeks of the company passing the resolution to liquidate my company. Any director who makes this declaration without having reasonable belief that it is correct may later be subject to a fine or imprisonment or both if this statement is untruthful.

Members voluntary liquidation process

Once the liquidation of the company has started the liquidation process, which is driven by the liquidator, means that the directors’ powers cease at the date of the company liquidation.

  • as part of the liquidation process, if the liquidation goes on for longer than a year, an annual report must be sent to all the members and creditors of the company and the Registrar of Companies which gives certain prescribed information concerning the progress of the member voluntary liquidation.
  • the liquidator liquidating a company in members voluntary liquidation will, using liquidation sales, liquidate assets of the company and distribute those liquidated assets for the benefit of repayment of all creditors, with any surplus being used to repay members.

If you are considering members voluntary liquidation as an option then contact our team experts today to discuss the members voluntary liquidation process in more detail and to discuss how we may be able to help with your concerns.

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