Members Voluntary Liquidation
It is generally advisable to take steps to deregister companies that have outlived their usefulness.
There are two ways you can deregister a solvent company:
- Through a members voluntary liquidation, which is a procedure for solvent companies initiated by the company’s members and involves the orderly winding-up of the company’s affairs, the appointment of a liquidator to manage the process of realising the company’s assets, ceasing or sale of its operations, payment of its debts (if any) and distribution of surplus assets (if any) among its members; or
- By applying to the Australian Securities and Investments Commission to voluntarily deregister a company assuming it meets certain legal requirements.
There may be tax benefits to shareholders by deregistering a company through a members voluntary liquidation rather than simply applying to voluntarily deregister.
A members voluntary liquidation is also an effective method of resolving disputes between directors and shareholders.
To commence a members’ voluntary winding-up, the majority of the directors must make a written declaration that they have made an inquiry into the affairs of the company and that at a meeting of directors they have formed the opinion that the company will be able to pay its debts in full within 12 months after the commencement of the winding-up. This is often referred to as a solvency declaration.
DW Advisory, through its experienced professionals, is well positioned to wind up solvent companies.
For more information on the members voluntary liquidation process, please contact us to arrange an immediate initial interview without obligation.