1 January 2013 – Members’ Voluntary Liquidation: Better Safe Than Sorry

A voluntary winding-up occurs when either the shareholders or creditors of a company decide to terminate the business. It takes two forms (1) The members’ voluntary liquidation (MVL), whereby the directors make a statement of solvency in accordance with section 293(1) of the Companies Act and make a declaration that the company will be able to pay all its debts within 12 months following commencement of the winding-up; and (2) The creditors’ voluntary liquidation (CVL), whereby the directors do not make such a statement of solvency.

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