Creditors’ Voluntary Liquidation
Our licensed Insolvency Practitioners will lead you through a Creditors’ Voluntary Liquidation (CVL) ensuring efficiency and compliance
Our capable and proficient approach to a Creditors’ Voluntary Liquidation, gives a reassuring and structured route throughout the process.
What is Creditors’ Voluntary Liquidation?
A Creditors’ Voluntary Liquidation (more commonly known as a CVL) is the last resort for a company if it is insolvent and is simply unable to continue trading. The Directors/Shareholders of the company ‘voluntarily’ place the company into Liquidation.
Benefits of a CVL include:
How does a CVL work?
The CVL process is initiated by the Directors/Shareholders via a Company Resolution, which will effectively place the company into Liquidation. An Insolvency Practitioner (Liquidator) will be appointed by the creditors of the company to oversee the CVL process..
The Liquidator will gather an accurate picture of the company’s affairs and financial position and will identify and secure assets. They are also responsible for making decisions regarding staff, pensions and contracts. It is the Liquidator’s duty to act in the best interest of creditors to maximise their returns.
The next step is to raise money to repay the creditors of the company. This is achieved by ‘realising’ (selling) the company’s assets by way of a sale of the business as a whole or by selling individual asset, as well as pursuing any monies owed to the company.
Once funds are recovered, they are ‘distributed’ (paid) to creditors based on a hierarchy set out by the Government. The amount of money repaid to creditors depends on the value of the insolvent company’s business and assets.
A Liquidator is also responsible for investigating the conduct of the company’s Directors prior to the insolvency. They are required to submit a report to the Insolvency Service who may later commence disqualification proceedings against the Directors.
A Liquidation has no time scale but will usually end following the Liquidator’s final report to creditors, when the company will be dissolved and will cease to exist.