Running a company is no easy task. Aside from the countless moving parts, your supply chain and the management of your company, there’s the wider business world, which spins and tilts at its own will. Between all of these, it’s no wonder that a huge proportion of the businesses set up within the UK ultimately fold. Typically, they do so because of insolvency, or rather, an inability to pay off their debts. There is an occasion when you can liquidate your company without the company being insolvent. In fact, it’s perfectly possible to dissolve a company with great profits and a fine financial foothold. The process is called a members’ voluntary liquidation, so join us as we explain the process of a members’ voluntary liquidation and how to complete one.
In UK law there are a few reasons why you can choose to liquidate your own company, they are as follows:
– You (the director) has decided to retire and nobody else is willing or can run the business
– You don’t want to run the business anymore (health, family reasons et cetera)
– You would like to step down from running the family business and nobody else is willing or capable of running it after you.
If your reasons align with any of these, you are a viable candidate for members’ voluntary liquidation, though it has to be noted that this only applies if your business is solvent. If your business is insolvent then it does not qualify and will have to be passed as another form of liquidation altogether. With that in mind, let’s discuss how you should go about performing a MVL:
– First, download and print off a ‘declaration of solvency’. Fill in this declaration and have it signed by the majority of the directors at your company. Keep in mind that this is a legal document and offering fraudulent information will land you with a prosecution.
– Call a meeting of the shareholders at least five weeks later and pass a resolution for voluntary winding up.
– Advertise that resolution in The Gazette within 14 days of passing it at the shareholders meeting.
– Seek out and appoint a registered insolvency practitioner to act as liquidator, who will then take complete control over the business and the winding up of the company.
– Send the signed form to Companies House if you’re in England, Wales or N.I or to the Accountant in Bankruptcy in Scotland within 15 days of passing the resolution.