How to commence a voluntary winding up—the position under The Insolvency (England and Wales) Rules 2016
Produced in partnership with Karl Anderson of 4 Stone Buildings
How to commence a voluntary winding up—the position under The Insolvency (England and Wales) Rules 2016

The following Restructuring & Insolvency guidance note Produced in partnership with Karl Anderson of 4 Stone Buildings provides comprehensive and up to date legal information covering:

  • How to commence a voluntary winding up—the position under The Insolvency (England and Wales) Rules 2016
  • The resolution to wind-up—members and creditors’ voluntary winding-up
  • The immediate effect of the passage of the resolution
  • Preparing to enter into a CVL
  • Vacancy and release

This Practice Note sets out the position from 6 April 2017.

The resolution to wind-up—members and creditors’ voluntary winding-up

A company may only enter voluntary liquidation if:

  1. it has a fixed period which has expired, or an event has occurred which its articles say is an event leading to liquidation, and the company has passed an ordinary resolution to wind-up, or

  2. it passes a special resolution that it be wound-up voluntarily. See: Notice of meeting to pass special resolution to wind up: BANKRUPTCY AND INSOLVENCY (CORPORATE INSOLVENCY) [1545] and Special resolution to wind up and appoint liquidator: BANKRUPTCY AND INSOLVENCY (CORPORATE INSOLVENCY) [1512]

The old procedure of using an extraordinary resolution is no longer possible following Companies Act 2006 (CA 2006).

If the directors make a declaration of solvency under section 89 of the Insolvency Act 1986 (IA 1986), the company can enter into a members’ voluntary liquidation (MVL). For more information, see Practice Note: What is a members' voluntary liquidation (MVL) and where/when is it typically used?. If they cannot, it must enter creditors’ voluntary liquidation (CVL). For more 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 a meeting of the members for consideration. If it is passed, it must be advertised within