Creditors’ Voluntary Liquidation
Creditors’ Voluntary Liquidation (CVL) is the liquidation process initiated by the company director used by insolvent companies.
Insolvent: the inability to pay creditors in full as and when their payments are due
Top CVL Facts
- Only the company directors/shareholders can use this process
- It is a formal liquidation process so will need to be performed by a Licensed Insolvency Practitioner
- Typical longevity of the process is around 1 year
- Conduct of the director will be investigated by the Insolvency Practitioner as part of the process
How will a CVL affect the director, creditors, company?
The CVL process is only used by the shareholders/directors of a company who are looking to close down their company in the most efficient way possible due to insolvency.
Within the CVL process the Insolvency Practitioner has a duty to investigate the conduct of the director throughout their role. This investigation is to ensure they have not been involved in any wrongful trading which in turn has caused the insolvency of the company. If something is found during these investigations that may be questionable then the details are reported to R3 who will decide if further investigations are required.
If there are any funds within the company to distribute to creditors then this distribution will proceed in line with legal guidance. It must be noted that distribution to creditors is rare in an insolvent liquidation process.
The CVL process will ensure that the company is dissolved in the most efficient and effective manner for all involved parties.
What is the outcome of a CVL?
At the end of a CVL the main goals to be achieved include:
- The company has dissolved efficiently on Companies House register
- The director/shareholders have been cleared of misconduct from their role
What is the cost of a CVL?
Our fees start from £2,500 for the CVL process.