Members’ Voluntary Liquidation
Appointment Package
This package contains the necessary instructions and documentation to place a company
into Members’ Voluntary Liquidation.
Documents contained in package

Statement of Resolutions by Directors

Form 520 - Declaration of Solvency

Statement of Resolutions by Members
A copy of this package, a Fact Sheet and other useful information can be obtained from our
Web Site located at www.worrells.net.au.
Steps Involved
This package sets out the steps to appoint a liquidator to a Members’ Voluntary Liquidation. These steps are:


Step 1 – Passing of resolutions by the directors and execution of Declaration of Solvency
Step 2 – Passing of resolutions by members
The procedures involved for each step and the documents required are provided in this package.
A Fact Sheet and further information on these processes can be obtained from www.worrells.net.au.
What can you do in preparation for the appointment?
To expedite the process of winding up the company’s affairs and reducing the costs involved, you may wish to
complete the following tasks prior to the appointment:
1. Completion of up-to-date financials statement with details of all equity, reserve and franking accounts;
2. Lodgement of the company’s final tax return(s); and
3. Payment of all external creditors and employees of the company.
These tasks are not required to be completed prior to the appointment, but will assist with the winding-up of the
company’s affairs.
Other Information
The Australian Securities and Investments Commission and the Insolvency Practitioners Association of
Australia have jointly released several fact sheets that may be of assistance to directors, shareholders,
creditors and employees of companies in voluntary administration, liquidation or receivership. These fact
sheets are: These can be found on our website on the Fact Sheets page.





Liquidation: Guide to Creditors
Liquidation: Guide to Employees
Guide to Shareholders
Guide to Directors
Glossary of Terms
Step 1 – Directors passing resolutions
Prepare the Declaration of Solvency – Section 494 Corporations Act
A Declaration of Solvency (Form 520) must be lodged with the Australian Securities & Investments
Commission before the members can resolve to commence the liquidation. This declaration contains the
estimated realisable values of the company’s assets, its outstanding liabilities and details of the expected surplus
to be distributed amongst members.
It is essential that the directors establish that the company is in fact solvent prior to executing this declaration, as
a Members’ Voluntary Winding Up can only commence if the company is solvent, and able to pay all of its
creditors within 12 months of the appointment of the liquidator.
Directors should endeavour to have the Declaration of Solvency prepared and executed at the date of the
resolution being passed by them.
The Statement by Directors
The directors can either hold a formal director’s meeting, or execute a statement of that resolution under section
248A (more than 1 director) or 248B (1 director) of the Corporations Act. The Act states:
CORPORATIONS ACT 2001 - SECT 248A
Circulating resolutions of companies with more than 1 director (replaceable rule see section 135)
(1) The directors of a company may pass a resolution without a directors' meeting being held if all the directors
entitled to vote on the resolution sign a document containing a statement that they are in favour of the resolution set
out in the document.
(2) Separate copies of a document may be used for signing by directors if the wording of the resolution and
statement is identical in each copy.
(3) The resolution is passed when the last director signs.
CORPORATIONS ACT 2001 - SECT 248B
Resolutions and declarations of 1 director proprietary companies
(1) The director of a proprietary company that has only 1 director may pass a resolution by recording it and signing
the record.
(2) The director of a proprietary company that has only 1 director may make a declaration by recording it and
signing the record. Recording and signing the declaration satisfies any requirement in this Act that the declaration be
made at a directors' meeting.
Once the Declaration of Solvency is prepared, the directors need to resolve:



That the company is solvent and able to pay all its debts within a period of (12) twelve months;
That the Declaration of Solvency be approved and executed; and
That the members consider a resolution that the company be wound up.
Once the directors have executed the Statement of Resolutions by Directors and the Declaration of Solvency,
the following documents should be forwarded to Worrells:


Copy
Original
-
Statement of Resolution by Directors
Declaration of Solvency
The original of the Statement of Resolutions by Directors should be kept in the Corporate Register.
Once the above documents are received by Worrells, we will lodge the Declaration of Solvency with the
Australian Securities & Investments Commission and advise you that the members can consider their
resolutions.
The Statement by Members cannot be made until the Declaration of Solvency is filed with the Australian
Securities & Investments Commission, but must be sign within 5 weeks after the execution of the Declaration of
Solvency.
STATEMENT OF RESOLUTIONS BY DIRECTORS
COMPANY NAME: _______________________
A.C.N. ____________________
Section 248A - Section 248B
Corporations Act 2001
We, the undersigned, being all of the directors of ______________________, A.C.N. _________________
(“the company”) entitled to vote at a meeting of directors of the company hereby state that we are in favour
of the resolutions set out in this document being recorded:
Resolved
VOLUNTARY WINDING UP
That the company should be voluntarily wound up in a member’s voluntary winding up and that this will be
recommended to the members of the company
DECLARATION OF SOLVENCY
Having formed the opinion that the company could pay its debts in full within a period of twelve (12) months
from the commencement of winding up it was resolved that the directors would sign the Declaration of
Solvency.
All directors entitled to vote must sign if more than 1
Name – (Print Name)
Date
ASC registered agent number:
lodging party or agent name:
address:
telephone:
facsimile:
DX number
suburb/city
520
Australian Securities Commission
form
Declaration of
Corporations Act
494(1) & (2)
solvency
Company name
A.C.N.
Declaration
We declare
(a)
that we constitute a majority of the directors of the company, and
that we have enquired in to the affairs of the company.
(b)
that at a meeting of directors, we have formed the opinion that the company will be able to pay
its debts in full within 12 months of the commencement of winding up.
(c)
that a correct statement of the company's assets and liabilities as at the latest practicable
date ( specified on the statement ) before the making up of this declaration is

set out on page 2 of this form
set out in the annexure marked (
) of (
) pages.
Signatures
This form must be signed by as many of the directors as constitute a majority and in any event
not less than 2 directors.
Director - print name
1.
sign here
date
Director - print name
2.
sign here
date
Director - print name
3.
sign here
date
Director - print name
4.
sign here
date
Director - print name
5.
sign here
date
Director - print name
6.
sign here
date
(if insufficient space) Further details are enclosed in the annexure marked ( ) of ( ) pages.
Annexures must conform to the requirements shown at the end of this form.
Statement of assets and liabilities
(show amounts to the nearest $)
date of statement (d/m/y)
/
/
assets
estimated realisable values
cash at bank
cash on hand
marketable securities
bills receivable
trade debtors
loans and advances
unpaid calls
stock in trade
work in progress, as detailed in inventory
freehold property
leasehold property
plant and machinery
furniture, fittings, utensils, etc
patents, trade marks, etc
investments other than marketable securities
other property, as detailed in inventory
estimated realisable value of assets
liabilities
secured on specific assets
secured by floating charge(s)
estimated expenses of winding up
other estimated expenses
(including interest accruing until payment of debts in full)
unsecured creditors ( amounts estimated to rank for payment)
trade accounts
bills payable
accrued expenses
other liabilities
contingent liabilities
total of liabilities
estimated surplus after paying debts in full
rank for payment
Step 2 – Members passing resolutions
The Statement by Members
The members can either hold a formal meeting of members, or execute a statement of that resolution under
section 249A (more than 1 member) or 249B (1 member) of the Corporations Act. The Act states:
CORPORATIONS ACT 2001 - SECT 249A
Circulating resolutions of proprietary companies with more than 1 member
(1) This section applies to resolutions of the members of proprietary companies that this Act or, if a company
has a constitution, the company's constitution requires or permits to be passed at a general meeting. It does not
apply to a resolution under section 329 to remove an auditor.
(2) A company may pass a resolution without a general meeting being held if all the members entitled to vote on
the resolution sign a document containing a statement that they are in favour of the resolution set out in the
document. Each member of a joint membership must sign.
CORPORATIONS ACT 2001 - SECT 249B
Resolutions of 1 member companies
(1) A company that has only 1 member may pass a resolution by the member recording it and signing the
record.
(2) If this Act requires information or a document relating to the resolution to be lodged with ASIC, that
requirement is satisfied by lodging the information or document with the resolution that is passed.
Once we have advised you that the Declaration of Solvency has been filed with the Australian Securities &
Investments Commission, the members can execute the Statement of Resolutions by Members. The
members need to resolve the following points:




That the company be wound up voluntarily and that «Potential.Appointee1Name» and
«Potential.Appointee2Name» be appointed Liquidators for the purpose of such winding-up;
That the Liquidators be authorized to distribute in specie such assets of the company as they may
determine;
That the remuneration of the Liquidators’ be approved at a time basis applying the simplified
Solvency Management Rates published from time to time by Worrells (refer to the Worrells web-site);
That the Liquidators be empowered to destroy the records of the company 6 months after the
completion of the winding up.
The original Statement of Resolutions by Members should be returned to Worrells once executed. The
company is placed into liquidation when the last member executes the statement.
What will Worrells do then?
Our tasks will be as follows:
1. To liquidate the remaining assets of the company (if any or as required);
2. To ensure that all external creditors and employees have been paid and that no further claims
exist against the company;
3. To obtain Tax Clearance from the Australian Taxation Office, which may entail filing final Taxation
Returns if they have not been filed already; and
4. Distribute the surplus funds (or asset in specie if warranted) to the shareholders of the company.
STATEMENT OF RESOLUTIONS BY MEMBERS
COMPANY NAME: __________________________
A.C.N. __________________
Section 249A - Section 249B
Corporations Act 2001
We, the undersigned, being all of the members of_________________________, A.C.N. ____________
(“the company”) entitled to vote at a meeting of members of the company hereby state that we are in favour
of the resolutions set out in this document being recorded:
SPECIAL RESOLUTIONS
Resolved
1. That the company be wound up voluntarily and ________________________ and
___________________________ of Messrs Worrells be appointed liquidators for the purposes of such
winding up.
2. That the liquidators be and are hereby authorised to distribute in specie such assets of the company as
they may determine.
ORDINARY RESOLUTIONS
Resolved
3. That the remuneration of the liquidators and his agents and staff be determined on a time basis applying the
Simplified Solvency Management Rates published from time to time by Worrells and that the liquidators be
empowered to draw their fees from time to time.
4. That the liquidators be authorised to destroy the records of the company 6 months after the finalisation of
the liquidation.
All members entitled to vote must sign if more than 1
Name – (Print Name)
Date
INDEMNITY BETWEEN LIQUIDATOR AND MEMBERS
_________________________and ___________________________
Worrells
Solvency & Forensic Accountants
Dear Sirs
I , the undersigned shareholder of ___________________________ A.C.N. ___________________
hereby agree to indemnify you and keep you indemnified against all costs, actions, suits, claims, demands,
expenses and liabilities, including but not limited to any liability for tax, which may be brought or made
against or incurred by you in connection with your activities as Liquidators of the company.
Date:
EXECUTED by ____________________
[Shareholder]([A.C.N.]) in accordance
with Section 127 of the Corporations
Act 2001:
___________________________________
Director (of shareholder)
___________________________________
Director (of shareholder)
EXECUTED by
___________________________________
Shareholder 1
___________________________________
Shareholder 2