Creditors Voluntary Liquidation

Is creditors voluntary liquidation right for my business?

Creditors voluntary liquidation (CVL) is a formal insolvency procedure where the directors of an insolvent company have decided that their business is no longer viable and wish to wind the company up.

A business is classified as insolvent if it is unable to pay its debts or has more liabilities than assets. Once it has been determined that insolvency is unavoidable, it is then a matter of ascertaining whether there is a business to be saved under the current corporate umbrella or whether a new legal entity needs to be formed to take the business forward or whether it is a case of closing the shutters on the business and entering into a fire sale (closing down sale of the business assets).

The knowledge of a licensed insolvency practitioner is an essential part of this process and engaging a qualified individual is a key to the directors.

At My Insolvency, we have a licensed insolvency practitioner with over 35 years’ experience, together with qualified individuals well versed with all aspects of insolvency, in order to assist directors and their businesses. We do not take insolvency appointments and we look at all aspects of your business, before making any form of recommendations to the board.

In the event that liquidation is the most appropriate route, through a voluntary liquidation process, then meetings will need to be held (virtual or real) with the shareholders and creditors, to put the company into liquidation. This will allow the business to appoint a licensed insolvency practitioner to realise the company’s assets and distribute the funds to the various creditors.

Following the completion of the CVL, the company will be struck off of Companies House register and will cease to exist. Any liabilities that remain unpaid will be written off unless they have been personally guaranteed.

Although there are other options available like administration and company voluntary arrangements, which aim to turn businesses around, the CVL option is for those businesses that are generally beyond rescue. It should also be noted that a CVL is different to a members’ voluntary liquidation (MVL) which is the liquidation option available to companies that are solvent.

If you are a director of an insolvent company or think you are approaching insolvency, get in touch as soon as possible to find out what your options are and to avoid potential personal liability. We will always provide you with the options that are best suited to your company’s individual circumstances by giving you honest advice.

If you would like to know more about creditors voluntary liquidation (CVL) and whether it is right for you, speak to one of our specialist team on 0800 009 6106 or hello@myinsolvency.co.uk

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0800 009 6106

Email hello@myinsolvency.co.uk