Voluntary Liquidation

So you're worried about your struggling business. You're fed up of your creditors calling and chasing payments. So how do you put a stop to that? Voluntary liquidation could be a good solution.

There are two kinds of voluntary liquidation - creditors voluntary liquidation (CVL) and members voluntary liquidation (MVL)

A CVL is started by the directors, they inform the shareholders that the business is no longer viable and they must stop trading.  They then move to appoint an insolvency practitioner who will hold a creditors meeting in not less than 14 days but usually 21 days.  At the meeting the creditors vote to appoint a liquidator.  This is the most common type of liquidation and is the preferred method of closing a business that is insolvent and has no real prospect of making a profit.  All leases and contracts are terminated and effectively the company no longer exists.

An MVL is where a company is not insolvent but the owners wish to close the business.  This is known as a solvent liquidation and the business's assets are turned into cash.  All creditors are paid in full.  In order to go down this path a statutory declaration of solvency must be served.  This is an important legal process and proper advice must be taken.  For more information on this please refer to our MVL guide

Popular questions regarding voluntary liquidation, click for more information....

What is wrongful trading? 

What is compulsory liquidation?

Can I liquidate my own company? 


Can I be a director again if I liquidate this company?

Alternatives to liquidation like dissolution? Can you turnaround the company with a CVA?