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Voluntary liquidation


There are two kinds of voluntary liquidation:

members' voluntary liquidation (MVL) - which means the directors have made a statutory declaration of solvency;
creditors' voluntary liquidation (CVL) - which means that the directors have not made such a declaration.


1. When can a company go into MVL?

This can take place when the directors of a company believe that the company is solvent.

A majority of the company's directors must make a statutory declaration of solvency in the 5 weeks before a resolution to wind up the company is passed.

2. What is in the declaration?

The statutory declaration will state that the directors 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 declaration will include a statement of the company's assets and liabilities as at the latest practicable date before making the declaration.

3. When does liquidation actually start?

The liquidation starts when the members, in general meeting, pass a resolution (Companies Act 2006) (usually a special resolution) to wind up the company voluntarily.

4. Must notice of voluntary liquidation be given to anyone?

Yes. 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 the Registrar within 15 days of the general meeting.

5. When may a CVL be appropriate?

A company may go into CVL when it cannot pay its debts.

6. What must the company do?

The company passes a special resolution (Companies Act 2006) to say that it cannot continue in business because of its liabilities and that it is advisable to wind up.

The resolution must be:

advertised in the Gazette within 14 days; and
sent to the Registrar within 15 days.
A meeting of creditors must be held in the next 14 days after passing the resolution. Notice of the meeting must be sent to the creditors at least 7 days before the meeting. Also, the directors must prepare a statement of affairs for consideration at the meeting, and appoint one of themselves to attend and preside over the meeting.

When the liquidator is appointed, the directors must provide him or her with a statement of affairs and otherwise co-operate with the liquidator.

7. Does the company have to advertise notice of the meeting?

Yes. The meeting must be advertised in the Gazette and in two newspapers in the area where the company has its principal place of business.

8. What are the main duties of a liquidator?

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.

9. Does a liquidator need to notify anyone of his or her appointment?

Yes. Within 14 days of being appointed, a liquidator must publish a notice of appointment in the Gazette and notify the Registrar. If the liquidation is voluntary, the liquidator must also give notice in a newspaper in the area where the company has its principal place of business.

10. What does the liquidator have to send to Companies House?

The liquidator must send a statement of affairs and Form 4.20 to the Registrar within 7 days of the creditors' meeting.

The liquidator must also send a statement, in duplicate, of receipts and payments for the first 12 months of liquidation. After that, statements must be sent every 6 months until the winding-up is complete.

11. Can an MVL be converted into a CVL?

Yes. If the liquidator decides that the company will not be able to pay its debts in full in the period stated in the directors' statutory declaration of solvency, he or she must call a meeting of the creditors which must be held within 28 days. The liquidation becomes a CVL from the date of the meeting.

12. What are the requirements for giving notice in such a case?

The liquidator must:

post a notice of the meeting to each creditor at least 7 days before the date of the meeting;
advertise the date of the meeting in the Gazette and in 2 newspapers in the area where the company has its principal place of business; and
prepare a statement of affairs for consideration at the meeting. A copy of the statement must be sent to the Registrar within 7 days of the meeting.


13. What happens when the company's affairs are fully wound up?

The liquidator presents an account to final meetings of creditors and members 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.

14. Which forms should be used?

The appropriate forms are:

Form title Number
Notice of appointment of liquidator voluntary winding-up (members or creditors) 600
Statement of affairs in conversion from a members' voluntary to a creditors' voluntary liquidation 4.18 & 4.20
Statement of affairs in a creditors' voluntary liquidation 4.19 & 4.20
Liquidator's statement of receipts and payments 4.68
Members' voluntary winding-up declaration of solvency embodying a statement of assets and liabilities 4.70
Return of final meeting in a members' voluntary winding-up 4.71
Return of final meeting in a creditors' voluntary winding-up 4.72
Please note: With the exception of form 600, these forms are not available from Companies House. They can be obtained from company law stationers or by visiting the Insolvency Service website.