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.