Jurisdiction(s):
United Kingdom

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Key definition

Voluntary liquidation definition

What does Voluntary liquidation mean? Voluntary liquidation is the company-initiated process of winding up without a court winding‑up petition, used either to close a solvent company or to deal with an insolvent company outside compulsory liquidation. Legislation refers to “voluntary winding up” (Insolvency Act 1986 for England & Wales and Scotland; Insolvency (Northern Ireland) Order 1989; Companies Act 2014 (Ireland)), though “voluntary liquidation” is widely used in practice. - Commences by shareholders’ special resolution and appointment of a liquidator. - Members’ voluntary liquidation (MVL) applies where the company is solvent; directors must make a statutory declaration of solvency beforehand. - Creditors’ voluntary liquidation (CVL) applies where the...

Members’ Voluntary Liquidations in Scotland: Law and Procedure under the Insolvency (Scotland) (Receivership and Winding Up) Rules 2018 and 2021 (Amendment) Rules

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

The Insolvency (Scotland) (Receivership and Winding up) Rules 2018

The Insolvency (Scotland) (Receivership and Winding up) Rules 2018 (ISRWR 2018), SSI 2018/347, were presented to the Scottish Parliament on 14 November 2018 and took effect from 6 April 2019. As a result, these Rules altered the procedure for members’ voluntary liquidations (MVLs) in Scotland. Later, the Insolvency (Scotland) (Receivership and Winding Up) (Amendment) Rules 2021 (ISRWAR 2021), SI 2021/1025, were placed before the Scottish Parliament on 9 September 2021 and commenced on 1 October 2021. These subsequent Regulations amend the original Rules. Accordingly, this Practice Note addresses the law, procedures and practice governing Scottish MVLs from 6 April 2019 onwards, as contained in ISRWR 2018, SSI 2018/347, Part 3, and ISRWAR 2021, SI 2021/1025, Part 2.

What is an MVL?

An MVL is the procedure whereby a company’s members pass a special resolution to cease trading and appoint a liquidator to return the company’s capital to shareholders, culminating in the company’s dissolution. It is suited to solvent liquidations and must be used where the capital...

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Tim Cooper

Addleshaw Goddard

Tim is a Business Support & Restructuring partner at Addleshaw Goddard, based in Edinburgh, working in all aspects of corporate restructuring, asset recovery and insolvency. He has worked throughout his career as a corporate restructuring and insolvency lawyer, and has over 20 years career experience from the North of England and Scotland as a specialist in this area. Tim has worked on many high profile restructurings and insolvencies, including leading the team advising the liquidators of The Scottish Coal Company, administrators of Hawick Knitwear and of Ferguson Shipbuilders. Other career highlights range from handling Premier League and Championship football club restructurings, retail cases such as Dolcis Shoes, Whittard of Chelsea and Adams Childrenswear, manufacturing such as Silentnight Group, Behar Carpets, insurance mediation businesses such as FirstCity Group, and many others. Tim is also the Chair of R3 in Scotland, R3 Council Member for...

Eileen Maclean

Insolvency Support Services

Eileen Maclean is a licensed insolvency practitioner with over 30 years' experience of all aspects of personal and corporate insolvency in Scotland. Nine of those years were spent with EY in Edinburgh, where she passed her Joint Insolvency Exam, and commenced her MBA. Spotting an opportunity in the market, Eileen has been providing bespoke support services to the insolvency profession since 1999, including outsourcing and technical support, compliance reviews and extensive training programmes. She is recognised as the foremost trainer of Scottish insolvency throughout the UK, and for her thought leadership across the profession. Eileen specialises in complex issues and dispute resolution, where she combines detailed knowledge of the law with a pragmatic approach to get proven results for clients. She excels in compliance and practical advice and in the words of a peer, 'what she doesn't know about insolvency isn't worth...

Web page updated on 21/05/2026

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