Creditors’ Voluntary Liquidation (CVL)
A Creditors’ Voluntary Liquidation (CVL) is a liquidation process used to close an insolvent company. This means the company cannot pay its debts now and in the long-term. During the process of ‘winding up’ the insolvent business, any assets are sold and the cash used to pay creditors.
The Creditors’ Voluntary Liquidation (CVL) process
A CVL is usually instigated by the directors when there’s not enough assets to cover the company’s liabilities, which means the company is insolvent. To see if this applies to you, take our cash-flow and the balance-sheet tests.
A Creditors’ Voluntary Liquidation (CVL) might also be the best situation if enforcement action is being taken by creditors against your company, if you’re facing pressure for unpaid bills or if you’ve had to stop trading for unforeseen circumstances. We have an article which explains the CVL process in more detail. You can read it here.
As your licensed insolvency practitioner, we’ll act as the liquidator and take charge of the CVL process. In this role we’ll:
Get shareholders’ approval. A meeting will be called where at least 75% of shareholders must agree to the liquidation or ‘winding up’ of the company.
Send the ‘winding up’ resolution to Companies House. This must be done within 15 days of it being passed.
Sell the assets. We’ll handle this whole process and distribute the cash to your creditors.
Send a notice of the liquidation to The Gazette. Established in 1665, this is the official public record containing details of businesses going through the insolvency process.
Contact us about your situation and see if a Creditors’ Voluntary Liquidation (CVL) is the right option for you.