A winding-up procedure initiated by a resolution of the company in accordance with section 84 (1) of the Insolvency Act 1986. In a members' voluntary winding-up, the directors must make a statutory declaration of solvency within the five weeks preceding the resolution (s 89). This declaration states that the directors have investigated the affairs of the company and are of the opinion that the company will be able to pay its debts in full within a specified period, not exceeding 12 months from the date of the resolution. The liquidator is appointed by the company members. A creditors' voluntary winding-up arises when no declaration of solvency has been made (s 90) or when the liquidator in a members' voluntary winding-up disagrees with the forecast made by the directors (s 95–96). In these circumstances the company must hold a meeting of its creditors and lay before it a statement of affairs disclosing its assets and liabilities. A liquidator may be nominated by the company and by the creditors; the creditors' nominee is preferred unless the court orders otherwise (s 100). If the company nominee acts as liquidator prior to the creditors' meeting he can only exercise his powers with the consent of the court. The creditors can also appoint a liquidation committee (s 101).
In both types of voluntary winding-up the powers of the directors are restricted after the resolution for voluntary winding-up has been passed and they cease when a liquidator has been appointed.