There are two types of Voluntary Liquidation:
- A Creditors’ Voluntary Liquidation (CVL)
- A Members’ Voluntary Liquidation (MVL)
Creditors’ Voluntary Liquidation
This route is only appropriate if your company is insolvent. For example if:
- Its liabilities exceed its assets and/or
- It cannot pay its debts when they fall due and
- There is no prospect of the company continuing to trade
Under these circumstances, with assistance of the Directors, the Shareholders place the company into liquidation, with the creditors having the final vote on the choice of Liquidator. We are qualified to undertake the role of Liquidator, using our extensive experience and expertise to secure the best outcome.
Members’ Voluntary Liquidation
A Members’ Voluntary Liquidation (MVL) (or Solvent Liquidation) enables shareholders to put a solvent company into liquidation in order to unlock their capital. It can be used to secure an orderly winding up of a company or to close down a subsidiary (within a group of companies) that has outlived its usefulness.
Shareholders appoint a Liquidator, and a Statutory Declaration of Solvency is required, stating that the directors have conducted a full enquiry of company affairs and believe that it can repay its debts, with interest, within a 12-month period.
The Liquidator is appointed at an extraordinary general meeting of the company, if approved by 75% of shareholders’ votes. The Liquidator realises the company assets, settles any creditor claims and distributes the remaining assets to shareholders.
Our partners are licensed insolvency practitioners, so they can accept appointments as Liquidators, using their industry knowledge to seek optimum results that will benefit all parties.
It is extremely important that the full tax implications are considered by the directors before selecting the Members’ Voluntary Liquidation option.