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Members' Voluntary Liquidations
A members' voluntary liquidation is a procedure only available to a solvent company. It is often used when:
- A company has ceased its operations and there are assets to be distributed.
- The shareholders are in disagreement as to the future management of the company.
- It is felt the company may start to incur losses, but is currently solvent.
- There is a need for re-organisation or reconstruction.
- The purpose for which a company was set up has been achieved.
As part of the process the directors must swear a Statutory Declaration of Solvency and the shareholders must pass a special resolution approving the liquidation. The appointed liquidator will then realise the assets and make distributions to the shareholders.
Where physical assets exist, the liquidator can distribute these "in specie" which eliminates the need for the assets to be sold. If this is necessary, the liquidator will require and independent valuation of the assets proposed to be distributed in this manner.
