This note outlines the basic procedure to be followed in a solvent (or members’ voluntary) liquidation.

  • Review of statutory books and company records to identify contingent creditors and other pertinent issues

  • Declaration of solvency drafted from up to date balance sheet

  • Board meeting to pass resolution to convene extraordinary meeting of members (EGM) and to approve declaration of solvency

  • Declaration of solvency sworn by all/majority (if more than two) directors, confirming that all debts will be paid within 12 months

  • Notices sent convening EGM giving 21 days’ notice (unless consent to short notice is to be obtained from >95% of shareholders)

  • EGM held passing resolutions to wind up the company, appoint joint liquidators, approve liquidators’ basis of remuneration and powers, and approve distribution in specie (if appropriate) – company now in liquidation

  • Declaration of solvency, notice of appointment of liquidators and resolutions sent to Registrar of Companies (by liquidators)

  • Notice of appointment and notice inviting creditors to claim placed in London Gazette and national newspaper (by liquidators)

  • Creditors notified individually (by liquidators)

  • Pre-liquidation tax computations and returns completed by company’s accountants/tax advisers, signed and submitted by directors

  • Liquidators seek HMRC approval of tax returns/clearance to close liquidation

  • All creditors claims dealt with by liquidators, either by payment in full or rejection

  • Final meeting of members convened on one month’s notice

  • Company is automatically struck from the register and dissolved 3 months after Registrar receives account of final meeting

    • Depending on how quickly the tax returns are completed, and HMRC deal with the returns, the liquidation should take approximately 4-6 months from the initial board meeting to the final meeting.

    All of the information provided is of course subject to the individual issues of each case, which will be dealt with as appropriate.

    Download and print your copy of our briefing note here – MVLs.pdf

      Disclaimer : Whilst every effort is made to ensure the information contained in this document is correct, Mercer & Hole do not and will not accept any responsibility for any inaccuracies, errors, or omissions; or for the consequences or your acting or otherwise on the information provided. Changes in legislation and other factors can affect the specific topic that is being discussed. It is not intended that the information contained in this document be a substitute for advice and consultation with a professional adviser. Further specific advice on any matter referred to must be taken at all times as many items that may be of interest could be extracted from complex legislation where additional guidance is required. Neither Mercer & Hole, nor its Partners, employees or agents be liable to you or anyone else for a decision made or action taken based on the information provided.


      Copyright : Any information copied or extracted must identify Mercer & Hole and, if we have disclosed this, the author concerned.