Creditors Voluntary Liquidation (CVL)
Creditors’ voluntary liquidation (CVL or “winding up”) is a formal process for insolvent companies which involves the realisation of the company’s assets and, where possible, distribution to creditors and shareholders.
Insolvency is defined as having insufficient assets to meet all debts, or being unable to pay debts as and when they are due.
We can meet with directors to discuss all of the company’s available options. We provide clear advice on the available options for the company and also clarify directors’ duties throughout the process.
To begin the CVL process, shareholders, usually at the request of directors, resolve to place the company into liquidation. Shareholders nominate an Insolvency Practitioner of their choice to act as liquidator.
A meeting of creditors is held at which creditors can endorse the appointment of the nominated liquidator, or appoint a liquidator of their choice.
Following appointment, the liquidator’s main duties include:
• realising the company’s assets
• reporting to creditors and shareholders
• statutory reporting to the Department for Business, Innovation and Skills
• assisting employees with their claims
• where possible, distributing to creditors and shareholders
Once all matters in the liquidation are concluded, the company is then dissolved from the register at Companies House.
CVLs enable directors and shareholders to deal voluntarily with their company’s insolvency. At Bailams we strive to deliver an understanding service to directors, providing clear advice during what is inevitably a difficult time for their business.