Insolvency & Liquidation
4. Member Voluntary Liquidation
Firm / Chambers:
Last updated: 11 Aug 2015
- A company may be wound up voluntarily by its members if that company:
- is solvent; and
- resolves to do so by special resolution.
- To commence a members’ voluntary liquidation a majority of the directors must make a written declaration of solvency stating that they believe the company will be able to pay its debts in full within 12 months of the commencement of the winding up.
- The directors must attach a ‘statement of affairs’ to the declaration setting out the company’s assets and liabilities and the estimated cost of the winding up. These documents must be lodged with ASIC.
- Within five weeks of the directors’ solvency declaration the company’s members must pass a special resolution to wind up the company at a meeting of members.
- Members must be given a minimum 21 days written notice of the meeting.
- At the meeting at least 75% of votes must be in favour of the resolution for it to pass.
- If the resolution does pass a notice of the resolution must be lodged with ASIC and published in the Commonwealth of Australia Gazette.
- The company is generally considered to have commenced liquidation on the day of the passing of the resolution and must stop trading except so far as is needed for the beneficial winding up of the company.
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