Creditors voluntary liquidation

A creditors voluntary liquidation (CVL), is an insolvent liquidation begun by resolution of the shareholders, but subject to confirmation or replacement by the creditors.

A CVL is the most common way for directors and shareholders to deal voluntarily with their company’s insolvency. This is because it is in the interests of the directors to take action at an early stage in order to minimise the risk of personal liability for wrongful trading. Unlike a compulsory liquidation, a CVL does not bring the directors’ conduct under the scrutiny of the official receiver. An investigation into the company’s affairs is carried out by the liquidator whom is required to report to the Department for Business Innovation & Skills on the conduct of the directors.

When approached by directors whom wish to liquidate their business, we provide assistance to ensure that they do not fall foul of the provisions of the insolvency legislation. We will also liaise with lenders, landlords, creditors and staff through this period. When appointed we will use agents to value and maximise the realisation of assets. The proceeds of the sale are then distributed to the creditors, in a defined order of priority. Liquidation is, with only a very few exceptions, the end of the road for a company and it will then be removed from the companies register.