What is Creditors Voluntary Liquidation?
Creditors Voluntary Liquidation (CVL) is the most common liquidation process for companies which are experiencing financial difficulty. If a company is insolvent because it cannot pay its debts as they fall due or because its debts are more that its assets, the company can be placed into liquidation.
Once it is clear that there is no reasonable prospect of a company avoiding insolvent liquidation, company directors have a duty to take steps to liquidate the Company and should seek independent professional advice, without delay.
What is the process of placing a Company into CVL?
- Free initial consultation with Insolve Plus.
- A board meeting is held where the directors conclude that the company cannot continue to trade and should be placed into liquidation.
- A Statement of Affairs is produced showing the Company’s assets and liabilities, together with a report on the Company’s history and the events leading up to the liquidation. These documents are sent to the Company’s shareholders and creditors.
- A shareholders meeting is convened to consider the special resolution to place the Company into liquidation. This resolution must be passed by 75% of the shareholders.
- It is the responsibility of the Company’s creditors to confirm the appointment of the Liquidator, this is carried out by of a statutory decision procedure, either a virtual creditors meeting or by deemed consent. Creditors can request a physical meeting of creditors.
- Once the Liquidator is appointed it is their responsibility to realise and distribute the Company’s assets.Insolve Plus can guide Directors through every step of the liquidation process as well as assist with producing all the statutory documentation, Statement of Affairs, Company history and explanatory information. Contact Insolve Plus on 020 7495 2348 to arrange a free consultation with one of our Licensed Insolvency Practitioners.