Creditors' Voluntary Liquidation - Explained

Creditors' Voluntary Liquidation (CVL) is the process where the directors of an insolvent company can voluntarily take steps to wind up the company. The directors call meetings of the company's shareholders and creditors to consider resolutions to wind up the company and to appoint a liquidator.

WHEN IS A CVL USEFUL?

When a company is insolvent and no longer has a viable business worth saving. For example:
  • A company which has insufficient sales to cover its overheads and cannot continue to trade.
Insolvent, what does this mean?

S123 IA86 sets out the definition of insolvency which includes:- Creditor(s) are owed more than £750 and have either served a 21 day demand which has not been met or judgment has been given or it is proved to the satisfaction of the Court that the company cannot pay its debts as they fall due, or the company's liabilities exceed its assets including contingent liabilities.  

 

The Next Step

The options for a financially distressed business need to be very carefully considered. Simply forward your details on our Contact Form and we will contact you. Alternatively ring us on our FREE ADVICE LINE 0800 781 0990.

 

All debt solutions should be very carefully considered. Fees will be charged if a solution is taken in order for us to advise and administer the most appropriate action - all fees will be outlined during your consultation. Retained payment may place you further into arrears. The Business Debt Advisor complies with the Consumer Credit Act and you have the right to a cooling off period of 7 days. It is likely that your ability to obtain further credit in the short term will be affected and this may also be the case over the medium to long term.