Members' voluntary liquidation
A members' voluntary liquidation can only take place if the company is solvent. The directors must make a formal declaration of solvency, which must:
- be made by the majority of directors on a date no more than 5 weeks before the passing of the resolution for voluntary winding up;
- be filed at Companies Registry;
- state that the directors have made a full inquiry into the company's affairs and are of the opinion that the company can pay its debts and interest within a maximum of 12 months; and
- include an up-to-date statement of the company's assets and liabilities.
It is a criminal offence to make a declaration of solvency without reasonable grounds.
The shareholders must hold a general meeting of the company that passes a resolution:
- for voluntary winding up; and
- appointing one or more liquidators of the company.
The shareholders must pass a special resolution for winding up, unless:
- the company resolves that it cannot continue its business because of its liabilities, when an extraordinary resolution is required; or
- the articles of association of the company provide for it to be dissolved at a certain time, or following a certain event, when an ordinary resolution is required.
If it later turns out that the company is not solvent, the liquidator will call a meeting of creditors and the liquidation becomes a creditors' voluntary liquidation.
