Members Voluntary Liquidation

If a company is solvent, meaning it can pay its debts as and when they fall due, it may wish to wind up the company using a Members Voluntary Liquidation process.

A Members Voluntary Liquidation will allow the company to:

• realize the company’s assets
• satisfy creditor claims
• distribute the remaining proceeds from asset sales to the shareholders
• release shareholders from their responsibilities to the company
• a Liquidator’s distribution of exempt capital gains is the only way shareholders can receive retained tax free capital gains in a tax exempt form

Directors execute a Declaration of Solvency at a directors meeting, stating that the company debts will be paid within 12 months.  They must attach a Statement of Assets and Liabilities to the solvency declaration.

At least 21 days-notice must be given for a meeting of shareholders to pass the resolution winding up the company.  95% of the shareholders can consent to shorten the 21 day period.