Procedure and Appointment of the Liquidator in a Members Voluntary Liquidation (MVL)
Procedure and Appointment of a Liquidator in a Members Voluntary Liquidation (MVL)
Statement of Truth
Before seeking to appoint a liquidator in a members voluntary liquidation the law set out in The Insolvency Act 1986 says that the directors must thoroughly review the financial position of the company and when satisfied they must prepare a statement of affairs and sign a statement of truth that the assets and liabilities are accurately recorded and that there are a sufficient value of assets to pay all creditors in full with interest.. That statement of affairs sets out:
- the estimated realisable value of the company's assets
- the value of creditors claims
- an estimate of the cost of the liquidation process
- and a balancing figure being the estimated monetary return to shareholders after all creditors have been paid in full and the costs of the process have been settled.
Appointment of Liquidator
Once the declaration of solvency has been signed there is then very little further formality. Certain forms have to be signed at directors and shareholders meeting to resolve to wind up the company and appoint a liquidator.
The Liquidator
The liquidator so appointed:
- advertises his appointment
- realises all assets
- settles creditors
- pays the costs of the proceedings
- returns the surplus to the shareholders
When all of these actions have been completed the liquidator calls a final meting of shareholders to provide a report on all of his actions and a receipts and payments account to particularise the transactions undertaken by him.
From the above you can see that the procedure and appointment of a liquidator in a Members Voluntary Liquidation (MVL) is a fairly simple process.
