Solvent liquidation is the statutory process that must be used to return capital in excess of £25,000 to shareholders, where the company ceases to trade and there are funds available to the members. A liquidator is appointed to wind up the affairs of the company. The insolvency practitioner appointed as liquidator must realise any residual assets, but very often, all assets have been realised pre-liquidation, and the liquidator is simply dealing with the distribution of cash balances to the shareholders in proportion to their shareholding.
Ideally in advance of the appointment of the liquidator, all creditors have been paid by the company, and there are no outstanding balances to be paid. This includes any tax due as at the date of the intended liquidation.
The directors drive the liquidation process, and can pick their preferred liquidator. Despite it being a solvent winding up, an insolvency practitioner must be appointed as liquidator to deal with the company’s affairs. Dunedin Advisory’s insolvency practitioners are qualified to act as liquidators. We can advise you as shareholder or tax adviser on how best to structure a members’ voluntary liquidation.
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