A member’s voluntary liquidation is used if the shareholders of the business simply want to stop trading and close the business. The company remains solvent, however the owners simply want to close the business. There may be many reasons for this for example, the owners may want to focus on other businesses, the business structure of a corporate may need to be changed or the owners may simply wish to retire.

This is the most unusual form of company liquidation because more often than not, rather than close the business, the owners will look to try and find a buyer and sell the company as a going concern.

Assets sold and Employees made redundant

During the closure process, all of the business assets will be sold and turned into cash. All staff will be made redundant and paid in accordance to their redundancy terms. Any outstanding creditors will be paid in full.

Any cash or remaining company assets will be shared out between the owners of the business. The company will then be dissolved and will no longer exist as an entity.

A member’s voluntary liquidation can only be used if the company business is solvent. In order to qualify for this form of liquidation, the directors will have to make a legal declaration that the company is able to pay off all of its debts in full within 12 months from the date of the liquidation.