▪️Ideally, the company will have ceased to trade and final accounts will have been prepared by the company’s accountant and signed off by the directors. Additionally, it is beneficial in most cases for all tax (and other) liabilities to have been settled, otherwise, interest at 8% per year begins to accrue from the date of liquidation.
▪️A formal Declaration of Solvency must be produced. This document will provide details on the company’s assets and liabilities, which will prove that the company is both solvent and has the ability to repay its creditors, with statutory interest, in a maximum of 12 months. The company’s directors must swear the documents in front of a solicitor, confirming they believe its content to be true.
▪️A board meeting is held at which the decision is made to recommend to the shareholders that the company be placed into a solvent liquidation, the directors will sign off all relevant notices required to commence the MVL procedure.
▪️A General Meeting of shareholders is held at which shareholders will resolve to place the company into a solvent liquidation, so long as 75% of shareholders are in favor, as well as other resolutions relating to the distribution of the company’s assets.
▪️It is the role of the appointed liquidator to settle any outstanding debts with creditors (if any) before distributing the company’s assets amongst the shareholders.
▪️The liquidator must obtain clearance from government departments to confirm that they have no objection to the liquidation being completed.
▪️Following the filing of the liquidator’s final report at Companies House, the company is removed from the register three months later and is dissolved.