Members' Voluntary Liquidation
A Members' Voluntary Liquidation allows a solvent company to put itself into liquidation and wind up the affairs of the company (for example if there is no-one left to run a family business).
The company's directors must make a statutory declaration of solvency in the five weeks before the resolution to wind up the company is passed stating that they have made a full inquiry into the company's affairs and that, having done so, they believe that the company will be able to pay its debts in full within 12 months from the start of the winding-up. The statutory declaration must also include a statement of the company's assets and liabilities as at the latest practicable date before the making of the declaration. The liquidation begins when the shareholders pass a special resolution to wind up the company voluntarily.
Notice of the special resolution for voluntary winding-up of the company must be published in the Gazette within 14 days of the general meeting. The company must also send a copy of the declaration and the special resolution to Companies House within 15 days of the general meeting.
The liquidator is appointed to wind up the company's affairs. The liquidator does this by calling in all the company's assets and distributing them to its creditors. If anything is left over, the liquidator distributes it among the members of the company. Within 14 days of being appointed, a liquidator must publish a notice of appointment in the Gazette and notify Companies House.
The liquidator presents an account to a final meeting of shareholders of the company. He or she must advertise the meetings in the Gazette at least one month before. Within one week of the meeting having taken place, the liquidator must send the account to the Registrar and a return of the final meeting. Unless the court makes an order deferring the dissolution of the company, it is dissolved 3 months after the return and account are registered at Companies House.
If the liquidator considers that the company will not be able to pay its debts in full within the period stated in the directors' statutory declaration of solvency, a meeting of creditors must be held within 28 days and the liquidation becomes a creditors' voluntary liquidation from the date of that meeting.