Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Voluntary winding up definition

What does Voluntary winding up mean? Voluntary winding up (voluntary liquidation) is the company‑initiated process for closing a company without a court order, realising its assets, paying liabilities, and dissolving the entity. It is a statutory regime in England and Wales and Scotland under the Insolvency Act 1986, in Northern Ireland under the Insolvency (Northern Ireland) Order 1989, and in Ireland under the Companies Act 2014. There are two forms: members’ voluntary liquidation (MVL) and creditors’ voluntary liquidation (CVL). In an MVL the company is solvent; the directors make a statutory declaration of solvency and the shareholders pass a special resolution to wind up and appoint...

Voluntary winding-up in England and Wales: resolutions, MVL/CVL conversion, creditor decision procedures, statements of affairs, liquidator appointment, statutory notices, and vacancy/release

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Practice notes

The resolution to wind-up

A company can move into voluntary liquidation only if one of the following applies:

its fixed duration has ended, or an event specified in its articles as triggering liquidation has occurred, and the company has approved an ordinary resolution to wind up; or
it passes a special resolution to be wound up voluntarily.

See:

97 Notice of meeting to pass ordinary or special resolution to wind up: Encyclopaedia of Forms and Precedents [1441]
103 Special resolution to wind up and appoint liquidator: Encyclopaedia of Forms and Precedents [1452]

The former practice of proceeding by extraordinary resolution is no longer available under the Companies Act 2006.

Where the directors make a declaration of solvency under section 89 of the Insolvency Act 1986 (IA 1986), the company may proceed by way of a members’ voluntary liquidation (MVL). For further information, see Practice Note: What is a members’ voluntary liquidation and when is it typically used?

If they cannot do so, the company must instead enter a creditors’ voluntary liquidation (CVL). For further information, see Practice Note: Creditors' voluntary liquidation—circumstances in which an insolvent company may be wound up voluntarily.

In either case, the resolution must be put to...

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