{"id":985,"date":"2021-12-29T00:55:44","date_gmt":"2021-12-29T00:55:44","guid":{"rendered":"https:\/\/uk.legalvision.com.au\/?p=985"},"modified":"2025-07-02T00:42:33","modified_gmt":"2025-07-01T23:42:33","slug":"wind-up-solvent-company","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/corporations\/wind-up-solvent-company\/","title":{"rendered":"How Can I Wind Up My Solvent Company in England and Wales?"},"content":{"rendered":"\n

Suppose you own a business, made some money, and have now decided to call it a day. Rather than sell the business to a buyer, you may want to sell off all the company\u2019s assets and distribute the cash to yourself and any other shareholders. This is called a \u201cmembers voluntary liquidation\u201d \u2014 also known as a \u201cvoluntary winding up.\u201d You can think of it as placing your company in (permanent) retirement. <\/span><\/p>\n\n\n\n

This article will explain the process of a member<\/span>s voluntary liquidation, as well as some alternatives to liquidation if you are considering winding up your company.<\/span><\/p>\n\n\n\n

Liquidation vs Dormancy <\/span><\/h2>\n\n\n\n

If you are thinking of liquidating your company<\/a>, you need to give it serious consideration because it is a permanent decision. Likewise, you cannot undo this action, with few exceptions, unless you reform your company by incorporating it again. Additionally, there are tax implications for liquidating your company, and the administrative process can be onerous. It can also be expensive. <\/span><\/p>\n\n\n\n

If you are unsure about liquidating your company, an alternative would be to let your company become a dormant company. This is essentially where your company ceases to trade but still exists on the Companies registry. Importantly, you will have to file annual accounts with Companies House<\/a>. However, if you think you may use your company again in the future, you may find it advantageous for your company to become dormant rather than liquidating.\u00a0<\/span><\/p>\n\n\n\n

Winding Up Your Company<\/span><\/h2>\n\n\n\n

Declaring Your Company Solvent<\/span><\/h3>\n\n\n\n

You need to declare that your company is solvent at least five weeks before your company\u2019s shareholders pass the special resolution<\/a> ordering to wind up the company. This declaration affirms that your company has enough assets to meet all of its debts.  <\/span><\/p>\n\n\n\n

A simple majority must make this declaration. So, for example, if your company has four directors, at least three of them will need to sign the declaration. <\/span><\/p>\n\n\n\n

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Further, you will need to file this declaration with Companies House. <\/span><\/p>\n<\/div>\n\n\n\n

Passing a Special Resolution<\/span><\/h3>\n\n\n\n

If you want to place your company into members\u2019 voluntary liquidation, the company\u2019s shareholders will need to pass a special resolution ordering it. This requires 75% or more of the shareholding votes. <\/span><\/p>\n\n\n\n

Your company can do this by:<\/span><\/p>\n\n\n\n