If you’re a director of the company, you may choose members' voluntary liquidation. This applies when your company is 'solvent' (can pay its debts in full), but you want to do one of these:
- step down from the family business and nobody else wants to run it
- not run the business anymore
- restructure your business
There are 6 steps to members’ voluntary liquidation:
- Make a declaration of solvency that states:
- after assessing the company, the directors believe it will be able to pay its debts in full together with interest at the official rate
- the company can make those payments within 12 months of the commencement of the winding up, which will start with the date the resolution to wind up is passed
- the details of the company’s assets and liabilities
(You can download a non-statutory template declaration of solvency from the Accountant in Bankruptcy’s website. The use of this template is not compulsory and it is provided as a guide only. There may be additional statutory content you require to include.)
- Sign the declaration of solvency - a majority of directors must do this.
- Call a general meeting of shareholders not later than 5 weeks after making the declaration of solvency. At the meeting, pass a resolution for voluntary winding up and appoint an authorised insolvency practitioner as liquidator.
- Advertise the resolution in the Edinburgh Gazette within 14 days of passing the resolution.
- Send the resolution to wind up the company to Companies House within 15 days of passing the resolution.
- Send the signed declaration of solvency to the Accountant in Bankruptcy within 15 days of passing the resolution.
When the liquidator is appointed they take control of the company and deal with its winding up. Your responsibilities as a director will change.
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