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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...

MVL contingent creditors: delay dissolution or liquidator valuation?

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Insolvency Rules 2016 (IR 2016), SI 2016/1024, Part 14

Part 14 of the Insolvency Rules 2016 (SI 2016/1024), which sets out how creditors’ claims are dealt with, also operates in a members’ Voluntary liquidation (MVL) by reason of r 14.1(1). That rule confirms that this Part applies to administration, winding up and bankruptcy proceedings, without any restriction confining its operation to insolvent Liquidations.

What amounts to a provable debt in a winding up (and equally in administration and bankruptcy) is defined by r 14.2(1). Save as otherwise provided in that rule, every creditor’s claim is provable as a debt against the company or the bankrupt, whether the liability is present or future, certain or contingent, ascertained or recoverable only in damages.

For further guidance, see Practice Note: Future debts, contingent debts, secured debts...

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Web page updated on 27/05/2026

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