The UK Rules
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MVL Explained

Members' Voluntary Liquidation Process

There are several reasons for not wanting to run a company any longer - even if it is solvent. This page explains the process of members' voluntary liquidation.

MVL GUIDE: Members can choose to liquidate their own company.

But, the business must be able to pay its debts 'trading solvently' and one of these reasons must apply:

Company shareholders must pass a resolution before they apply for members’ voluntary liquidation. That means you must:

Note: The current company assets and its liabilities will need reviewing before you make the declaration.

Making a Declaration of Solvency

A declaration of solvency is a statement written by the directors. They declare that they have assessed the company and it can pay all its debts.


This must apply even with any interest added at the official rate. A declaration of solvency should include:

After Signing the Declaration or Form

Members who want to wind up a company voluntarily still have a few more steps to complete. After signing the declaration or the form you should then:

  1. Sign the declaration or form 4.25 (Scot). The majority of the directors must sign it in front of a solicitor or a 'notary public'.
  2. Call for a general meeting with the company shareholders. It must take place no more than 5 weeks later and they must pass a resolution for voluntary winding up.
  3. You should appoint an authorised insolvency practitioner at the meeting. They act as a liquidator who will then take charge of winding up the organisation.
  4. Advertise the company resolution in The Gazette Official Public Record within 14 days.
  5. Send the signed declaration to Companies House or form 4.25 (Scot) to the Accountant in Bankruptcy (for Scottish companies). This must occur within 15 days of passing the resolution.

Companies House
Crown Way
Cardiff CF14 3UZ

Note: The appointment of a liquidator means they take control of the company from then on. That also means the directors' responsibilities change at the same time.

ALSO IN THIS SECTION

Liquidate a Company: The key aspects to consider when liquidating your limited company.
Compulsory Liquidation: How company directors can apply to the court for a winding up order.
Creditors' Voluntary Liquidation: CVL involves creditors because the company cannot pay its debts.
What Does a Liquidator Do? A liquidator is the official receiver who conducts the liquidation process.
What happens to Directors? How liquidation affects the directors if a liquidator gets appointed.

Members' Voluntary Liquidation Process: How to Liquidate a Solvent Company in the United Kingdom