Editing Liquidation (section)

==Voluntary liquidation==
Voluntary liquidation occurs when the members of a company resolve to voluntarily wind up its affairs and dissolve. Voluntary liquidation begins when the company passes the resolution, and the company will generally cease to carry on business at that time (if it has not done so already).<ref>{{cite web |title=Liquidate your limited company |url=https://www.gov.uk/liquidate-your-company/creditors-voluntary-liquidation |website=Gov.uk |publisher=Crown |access-date=30 July 2014 |archive-date=29 March 2015 |archive-url=https://web.archive.org/web/20150329035658/https://www.gov.uk/liquidate-your-company/creditors-voluntary-liquidation |url-status=live }}</ref> 

A creditors’ voluntary liquidation (CVL) is a process designed to allow an [[insolvent]] company to close voluntarily. The decision to liquidate is made by a board resolution, but instigated by the director(s). 75 percent of the company's shareholders must agree to liquidate for liquidation proceedings to advance.<ref>{{cite web |title=CVL |url=https://www.clarkebell.com/blog/creditors-voluntary-liquidation-guide/ |website=clarkebell.com |access-date=5 January 2021 |date=5 January 2021 |archive-date=7 January 2021 |archive-url=https://web.archive.org/web/20210107100623/https://www.clarkebell.com/blog/creditors-voluntary-liquidation-guide/ |url-status=live }}</ref> If a limited company’s liabilities outweigh its assets, or the company cannot pay its bills when they fall due, the company becomes insolvent.

If the company is [[Solvency|solvent]], and the members have made a statutory declaration of solvency, the liquidation will proceed as a members' voluntary liquidation (MVL). In that case, the general meeting will appoint the liquidator(s).<ref>{{cite web |title=MVL |url=https://www.clarkebell.com/blog/members-voluntary-liquidation-mvl-guide/ |website=clarkebell.com |access-date=5 January 2021 |date=5 January 2021 |archive-date=7 January 2021 |archive-url=https://web.archive.org/web/20210107125553/https://www.clarkebell.com/blog/members-voluntary-liquidation-mvl-guide/ |url-status=live }}</ref> If not, the liquidation will proceed as a creditors' voluntary liquidation, and a meeting of creditors will be called, to which the directors must report on the company's affairs. Where a voluntary liquidation proceeds as a creditors' voluntary liquidation, a liquidation committee may be appointed.

Where a voluntary winding-up of a company has begun, a compulsory liquidation order is still possible, but the petitioning contributory would need to satisfy the court that a voluntary liquidation would prejudice the contributors.