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Creditors’ Voluntary Liquidation (CVLs)

  1. Corporate Insolvency
  2. Creditors' Voluntary Liquidation (CVLs)

A Creditors’ Voluntary Liquidation (CVL) is a terminal insolvency procedure whereby the directors of a company instruct a Licenced Insolvency Practitioner to act as liquidator to wind up the company’s affairs.  The company’s shareholders pass resolutions to place the company into liquidation and to appoint a liquidator.

Due to relatively recent changes to insolvency legislation, a physical meeting of creditors can no longer be convened unless a request is made by the requisite threshold of creditors.  The liquidator’s appointment is therefore confirmed by creditors by way of a creditors’ decision process.  The creditors may also elect to choose an alternative liquidator.

A CVL may be appropriate when some or all of the following apply:

  • The company has a diminishing order book
  • The market for its goods or services has reduced or disappeared
  • Its liabilities are substantial meaning that a CVA would not yield a viable return to creditors
  • The directors no longer have the appetite to continue in business
  • A creditor has threatened to wind the company up through the courts and the directors would rather control the proceedings themselves
  • The company is insolvent and no longer viable

The appointed liquidator’s role is to realise the company’s assets and make a distribution to creditors if there are surplus funds after the costs and expenses of the liquidation have been met.  A liquidator also has a duty to carry out an investigation into the causes of the company’s failure and issue a report on director’s conduct to the Insolvency Service.​​​  Speak to us to discuss CVLs and the liquidation process in more detail.

Do you need expert help?

Speak to one of our experienced staff members about a Creditors' Voluntary Liquidation for your company. We are confident we can give you a great service at a competitive price.