|This is a procedure where the Company is solvent, there is no further use for the Company and thus its assets are required to be distributed to its shareholders as a return of capital. All creditors of the Company at the date of Liquidation must be paid in full together with statutory interest.
The procedure is managed by a liquidator, who must be an authorised licenced insolvency practitioner and is appointed by the shareholders.
The directors prepare a declaration of solvency which is accompanied by a statement of truth and presented to the Company's shareholders. The Company is placed into liquidation with the approval of not less than 75% of shareholders voting.
The liquidator's duties are then to realise all assets, settle any outstanding liabilities, obtain appropriate tax clearance and distribute the remaining assets to shareholders.
It is also possible for the Company's business to be restructured under section 110 of the Insolvency Act 1986. This is particularly useful if shareholders wish to separate different parts of the business into different legal entities.
When considering a members' voluntary liquidation professional advice should be sought from accountants in respect of any tax planning issues.