Members Solvent Winding Up |
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A
Members Solvent Winding Up occurs when the shareholders
and directors wish to terminate the trading of the company
and distribute the funds between the shareholders.
It is essential that correct tax advice
is received at this time. Normally the accountant who
has acted for the Company and the Directors will be
the correct person to give that advice. The winding
up itself must be performed by a Licenced Insolvency
Practitioner.
Following receipt of all necessary professional
advice, the Directors and/or Shareholders will make
a Declaration of Solvency. That Declaration must
be made no more than 5 weeks prior to the date of the
Resolution appointing a Liquidator.
The Directors must state in the Declaration
that the company will be able to pay all its debts within
a period of 12 months. A sworn copy must be filed at
Companies House no later than 15 days after the date
of the Resolution appointing a Liquidator.
The Special Resolution, appointing
a liquidator, must be passed by the Shareholders. The
requisite majority will be specified in the articles
of the Company. Formal notice must be sent to the shareholders,
and usually 21 days is required. Again, this is specified
in the Articles. A copy of the Resolution must be filed
at Companies House and advertised in the London Gazette
as well as locally.
The Insolvency Practitioner, working with
the accountant, will agree with the Inland Revenue and
Customs and Excise any liabilities that the company
may have. Those and all other liabilities must be settled
before any distribution is made to the Shareholders.
If, for any reason, the company is not
able to settle its debts, the liquidator may have to
call meetings to turn the Members Solvent liquidation
into a Creditors Voluntary Winding up under Sec 98.
Further details may be found in our other leaflet.
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