Voluntary liquidation (voluntary winding up)
A company may choose a Members Voluntary Liquidation (MVL) to close or restructure if the company is solvent (can pay its debts). Termed a solvent liquidation.
Compulsory liquidation (compulsory winding up)
Liquidation Process OverviewA liquidator (either the official receiver (an officer of the court) or a licensed insolvency practitioner) will administer the liquidation process. During the liquidation process the liquidator will take control of the business and ensure the following:
- Company trading ceases.
- Termination or transfer of any contracts (including employee).
- Settle any legal disputes.
- Gather money owed to the company.
- Liquidate assets and repay creditors accordingly.
- Pay liquidation costs.
- Remove the company from Companies House register and dissolve the company.
- Report upon director conduct and reasons for liquidation.