Creditors Voluntary Liquidation (CVL) is when the shareholders or directors of a company make the decision to close it by placing it into liquidation because they’re unable to pay their debts.
It’s a formal, legal insolvency process so has to be carried out by a licensed Insolvency Practitioner. A company can be placed into liquidation in as little as two weeks and we will take over dealing with your creditors from the very start of the process.
A Creditors Voluntary Liquidation is a terminal process and isn’t to be entered into lightly.
No. A liquidation is a formal insolvency event and has to be overseen and conducted by a qualified insolvency practitioner to ensure all stages of the process are fulfilled.
The process varies depending on the size and complexity of the business. It could be completed in as little as nine months or less, or could extend to over a year; to some extent this will depend on the attitude and actions of the company’s shareholders and its creditors.
The cost of liquidating a company can vary depending on several elements. How many creditors are owed money? How many assets does a business have and what is their value? Will the business name or a similar one be reused? Have any of the debts been personally guaranteed? Will there be any redundancies? Would you like to buy back any of the assets from the liquidator? Only when these are answered can we get a clearer view.
Creditors and shareholders may each attend a meeting. The shareholders’ meeting happens first where they will be appraised of the situation and invited to vote on the motion to liquidate the company. The creditors’ meeting happens afterwards where they will be appraised of the likely timescale of the liquidation and disposal of assets.
The assets will be sold and the funds used to pay back creditors.