A members voluntary liquidation is the process whereby members wind up a solvent company. A company is usually considered solvent if it can pay all of its debts as and when they fall due.
The directors will resolve to call a meeting of the members to wind up the company. The directors must complete a Declaration of Solvency which states that the company is solvent and that it can pay all its debts within 12 months.
Unlike other liquidations, there is no need for many of the investigations that would normally be undertaken as the company is solvent and creditors must be paid in full.
The liquidator will realize all assets and pay all creditors, complete the company’s financial statements and final tax return before obtaining clearance from Australian Tax office (ATO). The company will then be automatically deregistered by ASIC three months after the final meeting is held.
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